20070613Vol II Hearing.pdf

ORIGINAL
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
l- - - "
,-
IN THE MATTER OF THE APPLICATION
OF UNITED WATER IDAHO INC. TO
AMEND AND REVISE CERTIFICATE OF
CONVENIENCE AND NECESSITY NO. 143
) CASE NO. UWI-W-06-
BEFORE
COMMISSIONER MARSHA SMITH (Presiding)
COMMISSIONER MACK A. REDFORD
COMMISSIONER PAUL KJELLANDER
, -
;c-PLACE:Commission Hearing Room
472 West Washington
Boise, Idaho
DATE:May 30, 2007
VOLUME -II - Pages 7 - 132
, CSB REPORTING
Constance S. Bucy, CSR No. 187
17688 Allendale Road * Wilder, Idaho 83676
[phone] * [phone]
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For the Staff:Scott Woodbury, Esq.
Deputy Attorney General
472 West Washington
Boise, Idaho 83720-0074
For United Water Idaho:McDEVITT & MILLER
by Dean J. Miller , Esq.
420 West Bannock StreetBoise, Idaho 83702
For the City of Eagle:MOORE SMITH BUXTON & TURCKE
by Bruce M. Smith , Esq.
950 West Bannock, Suite 520Boise, Idaho 83702
For Kastera Development,
LLC:
Tom C. Morris , Esq.
Kastera LLC
15711 Highway 55Boise, Idaho 83714
CSB REPORTING
Wilder , Idaho
APPEARANCES
83676
PAGE
111
PAGE
WITNESS EXAMINATION BY
Gregory P. Wyatt
(UWI)
Mr. Miller (Direct)
Pre filed Direct Testimony
Prefiled Rebuttal Testimony
Mr. Woodbury (Cross)Mr. Morris (Cross)Mr. Smith (Cross)
Mr. Miller (Redirect)
Scott Rhead
(UWI)
Mr. Miller (Direct)
Prefiled Direct Testimony
Prefiled Rebuttal Testimony
Mr. Woodbury (Cross)Mr. Smith (Cross)
NUMBER DESCRIPTION
FOR UNITED WATER IDAHO INC.
Uni ted Water, Water
Distribution System
Premarked
Ci ty of Eagle Water System
Pressure Zone Map, etc.
Premarked
Eagle Area of City Impact Premarked
CSB REPORTING
Wilder , Idaho 83676
INDEX/EXHIBITS
BOISE , IDAHO, WEDNESDAY , MAY 30,2007 9:30 A. M.
COMMISSIONER SMITH:Good morning, ladies
and gentlemen.This is the time and place set for a
public hearing in Idaho Public Utilities Commission Case
No. UWI-W-06-, further identified as in the matter of
the application of United Water Idaho Inc. to amend and
revise certificate of public convenience and necessity
No. 143.ll begin today, I I m Marsha Smith.ll be
Chairing today I s hearing.On my left is Paul Kj ellander
President of the Commission, and on my right is Mack
Redford and the three of us are the Commission and the
people who will hear the case and make the decision in
this matter.
ll begin today with the appearances of
the parties, Mr. Miller.
MR. MILLER:Thank you, Madam Chairman.
Dean J. Miller of the firm of McDevitt & Miller on behalf
of the applicant United Water.Wi th me today are Mr.
Wyatt and Mr. Rhead, the company witnesses and we
prepared for hearing.
COMMISSIONER SMITH:And do we have
someone here for the Staff?
MR. WOODBURY:Scott Woodbury, Deputy
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Wilder, Idaho
COLLOQUY83676
Attorney General , for Commission Staff.
COMMISSIONER SMITH:Okay, and we have
some intervenors.For the City of Eagle?
MR. SMITH:Good morning, Madam Chairman,
Bruce Smith, Moore, Smith , Buxton & Turcke on behalf of
the City of Eagle.Wi th me today is Mayor Nancy Merrill
Mr. Vern Brewer , City engineer , and Nichoel Baird
Spencer , a planner wi thin the City of Eagle who are our
three witnesses.
COMMISSIONER SMITH:Thank you.Welcome
Madam Mayor , and for Kastera, LLC?
MR. MORRIS:Yes, Tom Morris with Kastera.
I also have with me Thomas Fassino who is a witness today
and we are ready for the proceedings.
COMMISSIONER SMITH:Mr. Morris, are you a
lawyer?
MR. MORRIS:I am.
COMMISSIONER SMITH:Okay; so we '
straight with the Bar here?
MR. MORRIS:I am an employee of Kastera
as general counsel , but I also am.
COMMISSIONER SMITH:You know, we were
sued a long time ago by the State Bar for allowing
representation of people who hadn t appropriately paid
their dues.
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COLLOQUY
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COMMISSIONER REDFORD:I know Mr. Morris,
we I ve locked heads a couple of times.
MR. MORRIS:Yes, we have.
COMMISSIONER SMITH:Okay, thank you.Are
there any preliminary matters that need to come before
the Commission before we begin taking testimony?
MR. MILLER:I just have a very brief
openlng comment, if I might.
COMMISSIONER SMITH:Yes, Mr. Miller.
MR. MILLER:Thank, you Madam Chairman
Members of the Commission.We would just like to be sure
that the Commission s record for decision includes the
comments that have previously been filed in the case,
most particularly United Water s comments of May 31st,
There we raised the issue of the City s ability to2006.
serve, legal ability to serve, outside of its area of
impact when the developer does not desire service from
the City.
As you know, Article 12, Section 2 of the
Idaho Constitution prohibits cities from exercising
municipal authorities outside their boundaries and Idaho
Code Section 50-323 limits the provision of water service
by cities to the inhabitants of the city.The legal
situation is a little admittedly fuzzy when a city
provides service to a willing developer wi thin its area
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COLLOQUY
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of impact in anticipation of eventual annexation , but
here Trailhead is outside the City I S area of impact and
the developer does not want service from the City, so the
City in our view has no legal ability to thrust itself on
to Trailhead to compel Trailhead to take service, and
thus, by necessary implication, the City has no standing
to obj ect to service by United Water.
We recognize that the Commission often
likes to develop a full factual record before deciding or
ruling upon legal issues, so we are proceeding with
today s hearing without waiving that legal position and
we reassert it now, so I just wanted to be sure that
re proceeding with that legal backdrop in the
Commission s mind.
Are there questionsCOMMISSIONER SMITH:
from the Commissioners?Mr. Miller, thank you for
calling that to our attention and you are right, we will
proceed with today I s hearing and take this legal argument
under advisement based on the comments that were
previously filed.Mr. Smith or Mr. Morris or Mr.
Woodbury, do you have anything to add?
MR. SMITH:Madam Chairman , if I can raise
one point.It raises the issues of the efficacy of
proceeding with this hearing today.As we have all
prepared for the hearing, looking at the testimony that'
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Wilder, Idaho
COLLOQUY
83676
been filed, the one glaring factual matter that appears
to be missing from this whole proceeding, and I think it
relates to the factual record that Mr. Miller was talking
about, we have a developer who has, to the best of our
knowledge, not filed any application with the county for
the development itself , so we have really no idea what
the county may or may not do in consideration of an
application should it ever be filed, and what's being
asked of the Commission today, of course, is to decide
whether to amend their certificate to allow United Water
to serve this area and with this glaring omission of any
information in the record whatsoever about what the
development will entail, how big it will be.There s a
considerable difference between prospective -- well,
there may be a difference, I I m not sure about this, about
how many houses are going to be up there.
If they proceed, and I think the testimony
will confirm this, the prefiled does, that if they
proceed with the county, there s a maximum of 108 houses
can be built up there.The testimony from United Water
is that they anticipate serving 5 to 700, so we I ve got
this void of any information about what is going to be
done with this particular development and so the City
would like to raise in straightforward terms is this
hearing premature, because I think the Commission is
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COLLOQUY
83676
being asked by United Water and the developer to approve
United Water being out there for service in the area and
we just have this void in the record of any information
whatsoever about the development, so we want to raise
that issue to make sure that this is an appropriate
proceeding and we re wisely using the time available to
the Commission and to us with regard to going forward.
COMMISSIONER SMITH:Thank you, Mr. Smith.
Mr. Woodbury?Mr. Morris?
MR. MORRIS:Yes, Madam Chairman.I would
just like to point out that I had originally filed the
testimony of Wayne Forrey and Mr. Forrey about two weeks
ago was involved in a very serious accident in Idaho '
beautiful back country along the south fork of the Salmon
Ri ver and broke his shoulder in two places, punctured a
lung, he broke his sternum, had some head inj uries and
some other very significant injuries and is in home in
bed.The good news is this past weekend he was able to
si t up for the first time and is in very serious
condi tion and because of that, not wanting to delay this
matter , I submitted the direct testimony of Thomas
Fassino who with Wayne was involved from the very
beginning of this proj ect and the two of them work
Mr. Fassino was the
--
was in charge of thetogether.
proj ect, proj ect manager and probably had more
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Wilder , Idaho
COLLOQUY
83676
invol vement than Mr. Forrey involved with this and
believe is competent and able to testify as to all of the
things that Mr. Forrey testified as they relate to this
matter.
COMMISSIONER SMITH:Okay.Mr. Smith
wi th regard to your argument, I think the Commission will
take the same position as it did with Mr. Miller
Consti tutional argument and we will take it under
advisement.Sometimes after you have the hearing the
answers to these questions become more clear and so
don t think it I S an inappropriate use of our time to go
forward today with the testimony since we re all here and
re all ready to go and, Mr. Morris, we were aware of
this substitution of witnesses and so I guess at the
appropriate time you ll put on the new person with his
testimony and the prefiled testimony of Mr. Forrey, I
assume, will not be entered in the record.
It will not be, no.MR. MORRIS:
Okay, thank you.COMMISSIONER SMITH:
there anything else?Mr. Woodbury.
Madam Chair, Staff , IMR. WOODBURY:
guess, appreciates Mr. Miller s argument regarding the
standing of the City to challenge the Company '
certificate application; however , we I re also appreciative
of the City s argument that it may be premature, I guess
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COLLOQUY
83676
to consider the certificate application without knowing
the needs and requirements of Kastera and
COMMISSIONER SMITH:So you 're just trying
to be everybody s friend?
MR. WOODBURY:, we just hope , Staff
hopes, this is not an exercise in futility and I think
procedurally it would be our desire, I guess, that the
Company would ask questions , more questions, of the
developer prior to filing applications for certificate
expansion.
COMMISSIONER SMITH:Thank you,
Mr. Woodbury.I think with that, Mr. Miller, it would be
appropriate to start with your witnesses.
MR. MILLER:Yes, Madam Chairman, thank
you.The applicant would call Gregory P. Wyatt, and if
there I S no obj ection , Madam Chairman , we would intend to
introduce or produce now both direct and rebuttal
testimony to expedite your hearing process.
COMMISSIONER SMITH:It's your case, you
can put it on --
MR. MILLER:Anyway I want.
COMMISSIONER SMITH:
--
any way you want.
CSB REPORTING
Wilder, Idaho
COLLOQUY
83676
GREGORY P. WYATT
produced as a witness at the instance of United Water
Idaho Inc., having been first duly sworn, was examined
and testified as follows:
BY MR. MILLER:
DIRECT EXAMINATION
Sir , would you state your name , please?
My name is Gregory P. Wyatt.
Are you the same Gregory Wyatt that
previously filed in this proceeding direct testimony
CSB REPORTING
Wilder, Idaho
consisting of four pages accompanied by one exhibit?
Yes, I am.
Are there any additions or corrections
that you would like to make to your direct testimony?
No, there are not.
If I asked you the questions that are set
forth in your written pre filed direct testimony today,
would your answers be the same?
Yes, they would.
And are those answers true and correct to
the best of your knowledge?
Yes, they are.
Did you also have occasion to prefile
WYATT (Di)
Uni ted Water Idaho83676
written rebuttal testimony consisting of seven pages?
Yes.
Are there any additions or corrections
that you would like to make to your rebuttal testimony?
Yes.Let me first state that in my
rebuttal testimony there are also two exhibits attached.
On page 3 of my rebuttal testimony, at line 18, a minor
typographical error I'd like to correct.I would like to
strike the first I" and then capitalize the letter
in the word "As.
And as you ve indicated, your rebuttal
testimony was accompanied by two exhibits, Nos. 2 and
is that correct?
Yes, that I s correct.
If I asked you the questions that are set
forth in your written direct testimony today, would your
answers be the same subj ect to the correction you ve just
made?
Yes, they would.
And are those answers true and correct to
the best of your knowledge?
Yes, they are.
Madam Chairman, we wouldMR. MILLER:
request that the direct and rebuttal testimony of Mr.
Wyatt be spread on the record as if read and that
CSB REPORTING
Wilder , Idaho
WYATT (Di)
Uni ted Water Idaho83676
Exhibi ts No.2 and 3 be marked and with that, we would
make Mr. Wyatt available for cross-examination.
COMMISSIONER SMITH:How about No.
MR. MILLER:And No.
COMMISSIONER SMITH:If there I s no
obj ection, we will spread the prefiled testimony of Mr.
CSB REPORTING
Wilder , Idaho
Wyatt across the record as if read and identify Exhibits
(The following prefiled direct and
rebuttal testimony of Mr. Gregory P. Wyatt is spread upon
1 through 3.
the record.
WYATT (Di)
Uni ted Water Idaho83676
Please state your name and business
address.
Gregory Wyatt,8248 Victory
Road Boise,Idaho.
Please describe your employment with
United Water Idaho,Inc.
I am employed by United Water Idaho
Inc. ,Uni ted Water ) in the capacity of General
Manager.I have been employed by United Water and the
former General Waterworks for 32 years.In my capacity
as General Manager, I am responsible for the overall
operations of United Water including water supply,
treatment, distribution, meter reading, customer service,
accounting, engineering, and administration.
What is the purpose of your
testimony?
I will generally describe the
proposed Trailhead development and the history of United
Water s involvement with the proj ect developer , Kastera
Homes ("Kastera
Are you sponsoring any exhibits with
your testimony?
Yes.Exhibi t No.1 is a vicinity map
of the area in question.
Are other United Water personnel
Wyatt, Di
Uni ted Water Idaho Inc.
sponsoring direct testimony in this proceeding?
Yes.Mr. Scott Rhead, United Water
Director of Engineering, will describe the facilities and
supply resources required to serve the Trailhead
development.
Please describe the procedural
history of this proceeding.
United Water I s Application to amend its Certificate
of Public Convenience and Necessity to include the
Trailhead Community was filed herein on April 26 , 2006.
Thereafter, the Commission issued its Notice of the
Application and Notice of Intervention Deadline.
September 8, 2006, the City of Eagle filed a formal
Wyatt, Di
Uni ted Water Idaho Inc.
Peti tion to Intervene, which was granted by the
Commission on September 19, 2006.
After intervention by the City of
Eagle, United Water officials and City of Eagle officials
met with representatives of the developer of the
Trailhead Community both independently and together with
Commission Staff , in an effort to resolve the matter by
agreement.The parties informally agreed to hold the
matter in abeyance pending these negotiations.
Thereafter Kastera and the City of
Eagle entered into discussions regarding possible
annexation of the Trailhead Community into the City of
Eagle and the City s ability to provide water service.
On February 20, 2006, Kastera sent
letters to United Water and to the City of Eagle
indicating that negotiations between the City of Eagle
and Kastera for annexation were unsuccessful and that
Kastera now firmly desires to obtain domestic water
service from United Water.
How many new customers will be served
by the addition of the Trailhead development to United
Water s certificated area?
It is reasonable to expect 500-700
new customers depending on zoning and conditions of
approval.
Wyatt, Di
Uni ted Water Idaho Inc.
Is the proposed development within
the municipal boundaries or area of city impact of any
municipali ty?
No.As depicted on Exhibit 1, the
development is located in an un-incorporated area of Ada
County, Idaho, and is north of the City of Eagle s area
of impact.A small portion of property owned by Kastera
is wi thin the City of Eagle I s area
Wyatt, Di
Uni ted Water Idaho Inc.
impact, but United Water is informed that this area will
not be developed and United Water would not provide
service to this area. United Water I s Application does not
request inclusion of this area wi thin its certificated
service territory.
Do any other water utili ties that are
regulated by the Commission have facilities in the area
of the proposed development?
No.Eagle Water Company Inc., does
have facilities wi thin the City of Eagle, but not in the
area of the proposed development.
Will United Water I s existing
ratepayers be in anyway burdened by United Water
service to the Trailhead development?
As explained in Mr. Rhead 'No.
testimony, the additional facilities required to serve
the development consist of extension of a 12 inch
mainline from United Water I s existing transmission maln
through rights of way along Eagle Road.Under United
Water s Rules and Regulations Governing Water Main
Extensions the cost of this mainline will be contributed
by the developer without refund from United Water.Mr.
Rhead also explains that United Water has adequate
existing source of supply resources to serve the expected
500-700 customers in the development.
Wyatt, Di
Uni ted Water Idaho Inc.
Does the Commission Staff agree with
this assessment?
I believe so. In its written Comments
filed June 1, 2006, Staff said:
United Water is ' also capable of
serving the development. As long as United Water follows
its established line extension rules, other customers of
Uni ted Water should not be adversely affected by the
addi tion of Trailhead"(Staff Comments
, pg.
3).
Wyatt , Di
Uni ted Water Idaho Inc.
Is United Water capable of providing
water service that is safe and reliable to the public?
Yes.Uni ted Water is capable of
providing safe, reliable and continuous service to the
Trailhead development.For over 100 years United Water
has shown itself capable of providing quality water and
good customer service to its customers.
Does that conclude your testimony?
Yes it does.
Wyatt, Di
Uni ted Water Idaho Inc.
Please state your name.
Gregory P. Wyatt.
Are you the same Gregory P. Wyatt who
provided Direct Testimony in this proceeding?
Yes, I am.
What is the purpose of your Rebuttal
Testimony?
I will respond to certain statements
contained in the Amended Direct Testimony of Mayor Nancy
Merrill.
On page 2 of her testimony Mayor
Merrill indicates the City has been preparing to serve
the Trailhead area because of its "partial location
wi thin the City s impact area, its consideration in the
City s Comprehensive plan, and its inclusion in the
Ci ty ' s Master Water Plan.Please respond.
First, Trailhead is not wi thin the area of the
Ci ty I S Master Water Plan. Attached as Exhibit 2 is the
Ci ty ' s water planning map indicating that the northern
border of the water planning area is south of Homer road.
This is confirmed in Mr. Brewer s testimony at page
lines 16-17.The Trailhead development is north of Homer
Road. The City I s own Comprehensive Plan, adopted February
13, 2007, at page 16 states, "In 2005, the City adopted a
Water System Master Plan that defines existing and future
Wyatt, Re
Uni ted Water Idaho Inc.
service areas. The Master Plan identifies maj or
infrastructure requirements in the service area including
storage tanks and water transmission mains from Linder
Road to Highway 16 and from Homer Road to Highway 20/26.
Eagle s own Comprehensive Plan confirms that Trailhead is
outside of the City I S water planning area.Second, the
portion of property
Wyatt, Re
Uni ted Water Idaho Inc.
intended to be developed by Trailhead, and for which
Uni ted Water has filed its request for service area
expansion in this proceeding, is outside - the City s area
of impact. Attached as Exhibit 3 is the City s Area of
Impact Map which is Map 1.2 incorporated in the City
Comprehensive Plan adopted February 13, 2007. In shows
the north boundary of the area of impact as Homer Road.
Thus, I do not understand the Mayor s reference to
consideration in the City s Comprehensive Plan " as
ci ties may only prepare comprehensive plans for areas
wi thin their impact area. Finally, I am not sure what is
meant by the phrase "been preparing to serve.I have
seen no tangible evidence of preparations for service.
On page 2-3 Mayor Merrill argues that
Trailhead should be part of the City because it will use
Ci ty amenities and will have the advantage of the
benefi ts of the City without paying for them.Please
respond.
Mayor Merrill does not define the
words " ameni ties " or "benefits " so there is no way to
know the substance of the so-called " ameni ties " or
benefi ts. "
Does the City of Eagle currently
provide water service to the maj ori ty of its residents?
No.The City of Eagle currently
Wyatt, Re
Uni ted Water Idaho Inc.
provides water service to only a small portion of its
residents; those who live in the Lexington and Brookwood
subdivisions area.At the end of April 2007, the City
water system served 1 328 customers, which when converted
to population using a 3X multiplier, equates to a
population of less than 4 000 persons , or only 19% of the
951 City of Eagle, 2007 population estimated by the
Communi ty Planning Association (COMPASS) as found on the
COMPASS websi te.
Wyatt, Re
United Water Idaho Inc.
I f the City of Eagle currently serves
water to only about 19% of its residents, who provides
water service to the remaining City residents?
Predominantly, water service is
provided to Eagle City residents by Eagle Water Company
and United Water Idaho.Eagle Water Company s 2007
Annual Report to the Idaho Public Utili ties Commission
indicates that they provide water service to 2 885
residential customers or a population of about 8,655,
using the 3X multiplier.United Water Idaho currently
serves 1 , 672 customers wi thin Eagle City limits,
representing a population of about 5,000.The remaining
population within the City of Eagle likely receives their
water service from individual and private wells.
Does the City of Eagle provide sewer
services to its residents?
Sewer service to the residentsNo.
of Eagle is provided by the Eagle Sewer District, which
is not a part of the City of Eagle.
Does the City of Eagle provide
roadway services to its residents?
Roadway services wi thin EagleNo.
and all of Ada County are provided by the Ada County
Highway District (ACHD).
What " ameni ties " then might be
Wyatt, Re
Uni ted Water Idaho Inc.
provided by the City of Eagle?
As I stated previously, as used by
Mayor Merrill in her testimony it is impossible to know
what the word is intended to encompass.However I
searched the City s websi te and found that they do offer
fi ve parks with one more under development.They also
offer a library.
Where are these parks located in
relation to the Trailhead development?
Wyatt , Re
United Water Idaho Inc.
All but one of the parks are located
south of Floating Feather Road and east of Eagle Road
with all but one clustered between Eagle Road and Highway
55.From Trailhead the closest park is about 3 miles
away.In reality, the City of Eagle s parks are closer
to some residents of the cities of Boise and Garden City
than they are to Trailhead.
You mentioned that the City of Eagle
has a library.Please identify its location and
proximi ty to Trailhead.
The Eagle City Library is located at
100 North Stierman Way in Eagle, which is east of Eagle
Road and just north of East State Street.The library is
over four miles away from Trailhead.
At pages 2-3 of her testimony Mayor
Merrill discusses the City s comprehensive planning
efforts. Please respond.
By definition a Comprehensive Plan
applies only wi thin a City s area of impact, so its
planning efforts have no application to the portion of
Trailhead for which United Water has filed its request to
serve, which is outside the City s area of impact.
On page 3 of her testimony Mayor
Merrill refers to Exhibit 201 and states that it
indicates properties surrounding Trailhead that are in
Wyatt, Re
Uni ted Water Idaho Inc.
some phase of being included wi thin the City.Have you
reviewed Exhibit 201 and does it show properties along
wi th their phases of being included wi thin the City?
I have reviewed the exhibit and it appears to
indicate the City s planning area and area of impact, but
does not indicate anything related to phases of lands
with
Wyatt, Re
Uni ted Water Idaho Inc.
regard to inclusion wi thin the City of Eagle.Also,
since Trailhead lies outside of the City s Impact Area,
the City s Comprehensive Plan maps could not refer to it.
On page 3-4 of her testimony Mayor
Merrill describes the development of a City Comprehensive
Plan and indicates that Exhibit 202 is a portion of the
Plan addressing water.Have you reviewed Exhibit 202 and
does it relate to water?
I have reviewed the exhibit and the
only significant portion relating to water is page 19
from the Plan which identifies five items referring to
water rates and Eagle s future water system.
What do you make of Exhibit 202?
The City appears to have an ambitious
goal of developing its own municipal water system, but is
in the very early stages of implementation.I believe
developers who are ready to construct now would not want
to be exposed to the risk and uncertainty that may result
from the City s desire to embark on such a complex
venture as designing, constructing and eventually
operating a municipal water system.
On page 4 of her testimony Mayor
Merrill responds that the Trailhead development has been
included in the City s Comprehensive Planning process,
and that Trailhead will be located in the City of Eagle.
Wyatt, Re
Uni ted Water Idaho Inc.
Please comment.
This statement can not possibly be
accurate because of the aforementioned fact that the City
of Eagle s Comprehensive Plan addresses only areas wi thin
the City s Impact Area, which Trailhead is not.
Addi tionally, as previously noted, the City s own
Comprehensive Plan and water planning map confirms that
Trailhead is outside of the City s water planning area.
Wyatt, Re
Uni ted Water Idaho Inc.
Mayor Merrill also indicates on page
4 of her testimony that United Water did not participate
in development of the City s Plan.Please comment.
If United Water received notice of
the planning effort, it was only a general public notice.
Uni ted Water s participation was not specifically
requested by the City and our views were not solicited.
In any event, whether United Water did or did not
participate does not seem relevant to the question of
which water provider is currently better prepared to
provide service to Trailhead.
On page 4-5 of her testimony Mayor
Merrill indicates the. Ci ty will participate in
Trailhead's Ada County plat approval proceeding and
recommend that the county disallow the application and
direct the developer to file a request for annexation
wi th the City and include using City water.The Mayor
indicates there could be "significant detrimental effects
on the City " and "it would disrupt the City s planning
process and would negatively affect the City s water
system development, roads and open spaces.Do you
concur?
No.I see no way that water service to Trailhead by
Uni ted Water could result in the detrimental effects and
planning process disruption the Mayor refers to.In the
Wyatt, Re
United Water Idaho Inc.
first place , Mayor Merrill provides no specifics as to
how the purported detrimental effects and planning
process disruption would occur.As stated previously,
Trailhead is outside of the City s Impact Area and thus
not considered in its Comprehensive Plan.Addi tionally,
the City s own Water Master Plan shows no future water
facili ties north of Homer Road, which is south of
Trailhead.Finally, as previously noted, United Water
currently serves about 25%
Wyatt, Re
Uni ted Water Idaho Inc.
of Eagle residents without any identified detrimental
effects or disruptions to the City of Eagle.
On page 5 of her testimony Mayor
Merrill also says the City can provide water less
expensively than United Water. Do you agree?
It is true that currently the City
tariff rate for water service is somewhat less than
Uni ted Water The City s current rates, however, may
not include recovery of the costs associated with the
City s ambitious plan to build a municipal water system.
These costs are unknown but potentially huge. Whether
those costs are eventually recovered through consumption
rates, connection fees, surcharges, or some other
mechanism, they will create upward pressure on the City
overall cost of service.
Does that conclude your testimony?
Yes it does.
Wyatt, Re
Uni ted Water Idaho Inc.
(The following proceedings were had in
open hearing.
COMMISSIONER SMITH:Mr. Woodbury, do you
have questions?
MR. WOODBURY:Thank you, Madam- Chair,
yes, I do.
CROSS-EXAMINATION
BY MR. WOODBURY:
Good morning, Mr. Wyatt.Wi thout an
expansion of United Water s certificated area of service,
is it your belief that the Company would have an
obligation to serve Trailhead?
Did you say without expansion?
Yes.
Without expansion the service
terri tory as authorized by the Public Utili ties
Commission, I don t believe that we are authorized to
serve outside of our certificated service area, except in
locations where it is an immediately adj acent small
bump-out they call it.
This is not one of those locations, is it
that would be an immediately adj acent small bump-out?
No, it is not.
CSB REPORTING
Wilder, Idaho
WYATT (X)
Uni ted Water Idaho Inc.83676
If the certificate expansion is granted,
does the Company become obligated to serve irrespective
of the ultimate development design and requirements?
m not certain that I can quote the law
on that.It is my understanding that there s a
perception of obligation , but I don t believe that it's a
legal mandate requiring under any and all conditions.
m aware that utili ties , other utili ties, who have had
certificated service territories granted to them have
subsequently petitioned the Commission or the Commission
has chosen to interj ect itself in proceedings and has
allowed the Company to rescind or turn back service
terri tories, thus denying service.
Except for the circumstances -- well, do
you feel that if a certificate expansion is granted that
you have an obligation to serve irrespective of the
development time line?
Certainly, United Water has service
terri tory which encompasses lands that have remained
undeveloped for a significant amount of time.I don
know that that changes the perception of obligation to
serve; however , it is a fact that there are lands which
this Commission has granted and authorized United Water
to be included in its service territory that have lain
dormant for years or actually, I should say, in
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Wilder, Idaho
WYATT (X)
Uni ted Water Idaho Inc.83676
agricul tural use or other than development use.
In the Company s application in this case
a statement is made
, "
There are no known public entities,
persons or corporations with whom the expansion is likely
to compete.In making this statement, what assumption
was the Company making regarding the City of Eagle
municipal water system?
Well, the assumptions that the Company was
making and on the premises upon which we filed the
application back in April of 2006 are the following:
First of all , United Water had no awareness whatsoever
that the developer Kastera had any discussions with the
Ci ty of Eagle or had any intentions of discussions with
the City of Eagle when we filed our application.Also,
in looking at the Eagle master planning area, we clearly
saw that the service territory that we were filing this
application to include was well outside of the City s not
only its water planning area but outside of its impact
area and so with those facts in mind, we perceived that
there was no existing water utility wi thin -- no
competing water utility in the vicinity.
So I understand, then , prior to the filing
of the application, United Water reviewed the City s comp
plan and water master plan?
I said I reviewed the City s water master
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Wilder, Idaho
WYATT (X)
Uni ted Water Idaho Inc.83676
plan map and I looked to see where their impact area
lines were and this application was outside of those
areas.
But it was your understanding that part of
the Trailhead proposal, the Trailhead property owned by
Kastera, was wi thin the area of impact of the City?
Recognizing there s a small portion of the
Trailhead property that's owned wi thin the larger area
that is included as, I guess ll call it, a parcel or
maybe it's many parcels, I'm not certain exactly how it'
comprised, but it is true there are some components of
land wi thin this development piece that lie wi thin the
City s impact area.In our discussions with the City or,
excuse me, with the developer, we were informed that the
developer had no intention of developing those lands with
municipal services and so we purposely designated the
service territory area that we filed in this application
to exclude those.
The developer had previously made the
decision not to include the 140 acres in its application
to the City?
In our discussions with Kastera before we
made the application back in April of 2006, it was our
understanding that they were not going to develop those
lands with municipal services.
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Wilder, Idaho
WYATT (X)
Uni ted Water Idaho Inc.83676
You would agree that the development of
Trailhead requires approval of governmental planning
authori ty?
Certainly.
And either the county or the city?
I believe that's right.
Does United Water include the Trailhead
area in its water master plan as future area to serve?
I believe that our water master plan
includes areas to the north of Trailhead as well, yes.
But also includes Trailhead?
Well , you know , it includes lands in that
area.When the master plan was conceived, Trailhead as
it's now designated was not a specifically designated
piece of land in our master planning studies.ve done
our master planning studies based upon ' proj ections
growth in the west main service level which would include
that area.
My question is in the map in which the
Company uses with respect to future growth, does it
include an area which Trailhead is wi thin?
I believe it does.
And is that also reflected in the map that
the Company included as future service area in its
integrated municipal application package with Water
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Wilder , Idaho
WYATT (X)
Uni ted Water Idaho Inc.83676
Resources?
Subj ect to check, I believe it does.
haven t looked at that map to make that comparison in the
recent days leading up to this hearing, but I believe
that it does.
And the developer of the Trailhead
Community is Kastera?
I believe that's right.
And to your knowledge, has Kastera filed
an application and a detailed development plan with
ei ther the county or the city?
I don t think they have.
Uni ted Water filed its application for
certificate expansion in April of 2006 to include an area
identified as the Trailhead Community.Was it your
understanding at that time that Trailhead Community was
i 7 to be a planned community?
It was
--
in the discussions we had with
the developer, that was what we presumed, yes.
And is planned community a term of art
under county planning?
I don t know what terms of art the county
has under its county planning.
You re not familiar with county
ordinances, county planning ordinances, with respect to
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Wilder , Idaho
WYATT (X)
Uni ted Water Idaho Inc.83676
zoning?
Not intimately, no.
Pardon?
Not intimately, no.
Is Mr. Rhead better familiar with those?
I don t know.You d have to ask him.
Are you familiar with correspondence
between Kastera and United Water?
Yes, I believe I am.
In a letter dated May 24th, 2006 after the
application filing, there was a letter to John Lee of
United Water and who is John Lee?
John Lee is an employee of United Water in
our engineering department.He interacts with developers
on new service requests.
And that letter purports to be from Wayne
Forrey and indicates that he is the director of planning
and development for Kastera and that letter states, "I am
writing to formally restate our request for extension of
water mains and water service facilities to serve our 660
acre property in the foothills north of Eagle.Later in
the same letter it says, "We are requesting water service
from United Water to serve our property outside of the
area of impact boundary ; so it's your understanding that
the 660 acres that initially he was asking service for
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Wilder, Idaho
WYATT (X)
Uni ted Water Idaho Inc.83676
was to be reduced by the 140 wi thin the area of impact?
The application that we filed for the
service territory request never included those acres.
No, Kastera included it in their letter to
you and basically he was formally restating their request
which was perhaps made orally to the Company.
The initial request, I believe, came in
the letter as well.Again , I'd have to see the documents
to verify that, but the letter you re referring to from
what you ve read and I don t -- if you show it to me, I
can be more clear, but without having it directly in
front of me, from what you said, it sounds to me like
Mr. Forrey was referring to his development , the 660-acre
development , in total and saying that he was requesting
service for those areas outside of the City s area of
impact.
And the area that we re talking about is
520 acres that the Company has requested included in its
certificate; correct?
I haven t done a survey, but I'll take
your word for it.
Give or take; so being unfamiliar with the
county planning, would you accept that the minimum number
df acres outside of a city area of impact that's required
to qualify as a planned community is 640 acres?
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Wilder, Idaho
WYATT (X)
Uni ted Water Idaho Inc.83676
Sure, I'll accept that.
In your direct testimony, page 2 , you
indicate that the number of customers the Company
anticipates serving is 500 to 700 depending on zoning and
conditions of approval.That range of customers was
calculated by the Company or provided by Kastera?
It was provided by Kastera based upon a
presumption of a planned development, I believe.
Did they indicate what type of zoning
would be required and what conditions of approval would
have to be granted?
No.
Did the Company lnquire?
was early the process.
presumed that they were still in the planning stages of
the development and many things change during the
planning stages and certainly, also with the application
process through governmental agencies, things change.
Okay; so there was no discussion of then
the number of acres and the density?
We believed that the 500 to 700 was
probably the high end number , so from the standpoint of
capacity and ability to serve, we thought that we should
look at what would be the high end number , not the low
end number without doing a serious amount of leg work
CSB REPORTING
Wilder, Idaho
WYATT (X)United Water Idaho Inc.83676
wi th county ordinances and requirements and planning
rules as to what could be done.We believe that's the
developer s job.
The City has indicated a range of between
66 and 108 homes under current county planning.Is that
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Wilder, Idaho
what United Water considered as the low range?
I think my testimony stands for itself.
So you didn t know what the low range
The low range would be one.
Okay.
I guess.
Would United Water have considered
extending service for one customer?
If a developer wishes to pay for it, which
is in accordance with our rules and regulations, we would
Whether we would do it or not is another
Would the facilities and supply required
to serve 66 customers be different than the requirements
for 700 customers?
Yes, it would be.
Does Trailhead, to your knowledge, have
available separate surface irrigation water?
It's my understanding that the Trailhead
was?
consider it.
question.
WYATT (X)
Uni ted. Water Idaho Inc.83676
development does not have separate surface water
available to it.
Are the irrigation requirements comparable
regardless of density?
Irrigation requirements are going to be
dependent upon what is built.
Was there discussion with Trailhead as to
whether they would propose CC&R' s that would restrict the
use of water for outdoor irrigation?
No, because I don t believe Kastera had
gotten that far in their planning process.
Do you know how much water is required to
green 520 acres?
don know.
Okay.
However aware that there are certain
portions of the Kastera development, the lands that are
in this application that are not developable under
certain requirements from just a sloping and hillside
landscaping or, excuse me, topography standpoint.
You state that United Water s existing
customers will in no way be burdened by service to
Trailhead.The City appears to have an ordinance that
requires this outcome and the City also requires that
developers provide water.Is Kastera proposing to pay
CSB REPORTING
Wilder, Idaho
WYATT (X)
Uni ted Water Idaho Inc.83676
for supply water?
Our rules and regulations in this matter
do not allow that.
Has United Water set aside any surplus
water capacity for Trailhead?
I believe our testimony is that United
Water has available capacity to serve the Trailhead
development.
How much water will Trailhead require?
That will depend on what they build.
Pardon?
That will depend upon what they build.
Can United Water
--
how is United Water
able to say that it can meet the supply requirements of
Trailhead without knowing what those needs and
requirements are?
Because we understood from Kastera that
they were planning residential subdivisions of some
nature.We understand and know from our history of
various developments throughout our existing system, you
know , what water demands are for systems that have
irrig~tion needs or , excuse me, I should say developments
that have irrigation needs, those that do not.We have
history of billing records in our possession from our
existing customers that can give us a pretty good rule
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Wilder, Idaho
WYATT (X)
Uni ted Water Idaho Inc.83676
thumb to use in applying an estimate to build-out numbers
and we did that ,we used that.
Scott Rhead, our engineer , can talk a
little more specifically about these equations and
numbers , but I'm aware that that's what we ve usually
done is taken those estimates of actual consumptions in
our system for different kinds of developments, whether
they have irrigation needs or whether they do not have
irrigation needs from United Water , and make those
applications and make those calculations to make an
estimate of how much water supply would be required.
Kastera indicated that United Water was
able to provide supply needed immediately without new
facilities.Was that representation correct?I mean,
when they say that the Company can provide it
immediately, you indicate that there s going to be a time
line required by the utility to put in infrastructure?
MR. MILLER:Pardon me, Madam Chairman
can we have a specific reference to whatever it is
Mr. Woodbury is referring to as what Kastera has said?
MR. WOODBURY:Yeah, let me get back to
that if you don t recollect that representation.
BY MR. WOODBURY:Did you have opportunity
to review the response to utility production requests
provided by Kastera, actually, it was provided by the
CSB REPORTING
Wilder , Idaho
WYATT (X)United Water Idaho Inc.83676
Ci ty, to your first production request?
m not sure if I understand what you
asking me.
May 18th , 2007 , first supplemental
response was provided to the City s first production
request and that was a Power Point presentation by
Kastera of apparently a public meeting format.
MR. MILLER:Could Mr. Woodbury produce
for our collective viewing what he is referring to?
MR. WOODBURY:Yes.
(Mr. Woodbury approached the witness.
BY MR. WOODBURY:Have you seen that Power
Point before, that response?
No, I have not.
The City of Eagle has indicated that it
intends to participate in the Trailhead county platt
approval proceeding.Will United Water participate,
also?
Typically, United Water does not
participate in county applications unless we re requested
to do so by the developer.
Okay, has the developer requested your
participation?
Not yet.
Do you believe that United Water was
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Wilder , Idaho
WYATT (X)
Uni ted Water Idaho Inc.83676
premature in its application for a certificate
expansion?
No.
Do you believe the Company should have
required more information from Kastera regarding needs
CSB REPORTING
Wilder, Idaho
, I believe that the development is such
that we were able to make reasoned estimates of
densi ties, proj ections based upon the information they
Would you agree that it's in the public
interest for area water providers to cooperate in water
planning and area of service decisions?
ve been promoting that for years,
MR. WOODBURY:Madam Chair , Staff has no
further questions of Mr. Wyatt.Thank you.
COMMISSIONER SMITH:Thank you,
Mr. Morris, do you have any questions?
and requirements?
gave us.
yes.
Mr. Woodbury.
WYATT (X)
Uni ted Water Idaho Inc.83676
BY MR. MORRIS:
CROSS-EXAMINATION
Mr. Wyatt, are you familiar with the
February 21, 2006 letter to John Lee initially requesting
CSB REPORTING
Wilder, Idaho
ve seen it.
And doesn t Kastera in there identify that
the initial development concept for this property is a
clustered community including 104 home sites, plus an
equestrian center to be developed in accordance with the
non-farm ordinance of Ada County?
Since you re reading, I certainly can
MR. MORRIS:No further questions.
COMMISSIONER SMITH:Mr. Smith.
water service?
MR. SMITH:Thank you.
CROSS- EXAMINAT ION
Good morning, Mr. Wyatt.
Good morning, Mr. Smith.
My name is Bruce Smith and I represent the
deny it.
BY MR.SMITH:
City of Eagle.
WYATT (X)
Uni ted Water Idaho Inc.83676
ve met.
Before I begin cross, I want to ask you
clarification of some questions Mr. Woodbury asked you.
CSB REPORTING
Wilder , Idaho
The initial letter that you received from Kastera asking
for service, were they asking for service on the 660
acres or just the portion, the 520 acres under your
current application amendment request?
Which letter are you referring to?
The first letter you got from Kastera.
Would that be the letter in February of
I believe so.The letter Mr. Woodbury was
My understanding
MR. MILLER:Why don t we produce the
last year?
letter and then we can all know what it says.
COMMISSIONER SMITH:Let's go at ease for
asking you about.
a few moments while the people figure out the letters.
(Pause in proceedings.
COMMISSIONER SMITH:All right, let's go
back on the record.
MR. SMITH:Okay, Mr. Wyatt, after a brief
pause, we ve now identified that there were two letters
to you.One was dated February 21st, 2006.The second
letter was dated May 24th, 2006, and with the Chairman
WYATT (X)
Uni ted Water Idaho Inc.83676
permission, may I approach?
COMMISSIONER SMITH:Yes, you may.
(Mr. Smith approached the witness.
BY MR. SMITH:So Mr. Wyatt, I've now for
the record handed you those two letters.Do you have
CSB REPORTING
Wilder , Idaho
I do.
Could you take a quick look at them
m a slow reader.
Read the first paragraph of each.
The first paragraph --
No, you can read them to yourself.
Oh.ve had a chance to review them
those?
As I look at the February letter, it
appears that Kastera was asking for service to the 660
acres.Would you agree with that?
Well , they also reference in that same
letter 520 acres within Ada County, so I think that they
made a statement about both components in this letter.
Would you read the first sentence, I
please?
Mr.Smi th.
believe, of the February letter referring to what they
were requesting service for, please?
Well, the first sentence is not the only
WYATT (X)
Uni ted Water Idaho Inc.83676
piece of this letter that requests what or speaks to what
they re requesting, but I'll be happy to read it.
That's fine, but would you read that first
sentence for us?
On behalf of Kastera Homes and Mr. Greg
Olsen, I'm writing to formally request extension of water
mains and water service facilities to serve our 660-acre
property in the foothills north of Eagle, Idaho.
Thank you.Now, if you ll turn to the May
letter , in that letter, it appears to me that they were
requesting service for the 520 acres, but not the 140
acres, is that your understanding of that letter?
In the review of this letter, I see the
reference to the 660 acres.In this letter, I do not see
any reference to the 540 acres.
Excuse me, let's go back to those numbers.
You re looking at the May letter; correct?
m looking at May 24th, 2006 letter.
And it refers to the 140 acres wi thin the
area of impact; correct?
Well, let me read it again , Mr. Smith.
Okay.
I don t see any reference in this one-page
letter dated May 24th to any 140 acres.What I do see is
two statements, among many:I am writing to formally
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Wilder , Idaho
WYATT (X)
Uni ted Water Idaho Inc.83676
restate our request of extension of water mains and water
service facilities to serve our 660-acre property in the
foothills north of Eagle, Idaho.Then lower down in the
third paragraph, the last sentence, "Therefore , we are
requesting water service from United Water to serve our
property outside of the Eagle area of impact boundary.
It doesn t reference 140 acres or 540 in this letter
far as I can see, unless I'm really missing something
here.
No, I don t think you are, thank you; so
was it your understanding when you got the first request
from Kastera that they were requesting service for 660
acres?
When we received this request, we met with
the developer and talked to them about what they were
requesting.It was our understanding based upon those
discussions that they were seeking development within
what has now come to be known as the 520- or 540-acre
That's what we put together as the application inarea.
this filing, excluding the area of their land which would
be wi thin the City of Eagle s area of impact and in the
county because that's what we understood they were
requesting.Regardless of what their letter said, that'
what we understood.
Okay, thank you.
CSB REPORTING
Wilder, Idaho
WYATT (X)
Uni ted Water Idaho Inc.83676
Would you like these back?
(Mr. Smith approached the witness.
Mr. Wyatt, Mr. WoodburyBY MR. SMITH:
asked you a question about the amount of water it would
take to irrigate a certain amount of land.Do you recall
that question?
I do.
And you said you didn t know.Would you
agree that if you have 700 homes on this tract of land
for which you applied for service that it would take less
irrigation water than if there were 108 homes on it?
Would you restate that question, please?
Would you agree that if you had 700 homes
on this tract of land that you ve applied to serve that
it would require less irrigation water than if there were
108 homes?
That would depend upon how the homes were
buil t, what land space those homes occupied and what
amenities were included in that development.
Okay, do you have any of that information
from the developer?
I do not.
Okay.Mr. Woodbury as ked you whether
Kastera was proposing to pay for water.I believe your
response was that our rules don t allow that.Was that
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Wilder, Idaho
WYATT (X)
United Water Idaho Inc.83676
correct?
For main extension, our standard main
extension rules and regulations do not provide for the.
CSB REPORTING
Wilder, Idaho
developer to provide the source of supply water
Okay; so I take it from that Kastera is
not offering to pay for any source of water?
Not at this time.
What does not at this time mean?
It means not at this time.
Do you think that they are going to
propose it at some time?
I don t know.
MR. MILLER:It calls for the witness to
speculate, we obj ect.
THE WITNESS:This Commission s rules and
correct.
COMMISSIONER SMITH:Mr. Wyatt, when your
attorney obj ects --
THE WITNESS:Shut up.
COMMISSIONER SMITH:Yeah.He said it, I
Mr. Smith, do you have any response to the
MR. SMITH:I believe it is wi thin this
regulations --
didn
objection?
WYATT (X)
Uni ted Water Idaho Inc.83676
wi tness ' purview when he says not at this time that it
not calling for speculation for him to offer testimony
to whether the developer would or would not offer to buy
the source of water.
Well , I think youCOMMISSIONER SMITH:
asked that question when you asked what does not at this
time mean.
And my follow-up questionMR. SMITH:
Madam Chairman , was about whether it would happen at some
time.
COMMISSIONER SMITH:Can you answer that
question , Mr. Wyatt?
m not certain that I can.THE WITNESS:
It depends on whether or not this Commission would change
its rules and regulations under which we operate.
Okay, but under the presentBY MR. SMITH:
rules, you couldn t accept it if .they did offer it;
correct?
I don t know that we couldn t accept it.
I don t believe we could require it.
Okay, thank you for that clarification.
Thank you.COMMISSIONER SMITH:
Mr. Woodbury as ked you ifBY MR. SMITH:
you had set aside available supply for service to
Your response was or testimony is that we canKastera.
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Wilder , Idaho
WYATT (X)
Uni ted Water Idaho Inc.83676
serve with present source of supply; correct?
Yes.
Have you set aside a specific amount of
your source of supply for service to Kastera?
It's a question which in my view doesn
have a defini ti ve answer and let me explain why.
Well, I prefer before you explain it you
answer yes or no.
The witness is entitled toMR. MILLER:
explain.
MR. SMITH:The witness is entitled to
answer my question and if his counsel wants to have him
explain , he can do that.
COMMISSIONER SMITH:Mr. Smith , I believe
that the witness is attempting to answer your question
which apparently in his view is not a yes or no answer.
MR. MILLER:Thank you, Madam Chairman.
THE WITNESS:United Water has sources of
supply available to provide water to its customers.
There are a variety and a number of developments in the
vicini ty of the Trailhead area and United Water has
available supply and plans for supply to developments.
We do not carve out and reserve a specific capacity for
specific development because developments sometimes fail
and do not come to fruition.We plan for the system
CSB REPORTING
Wilder , Idaho
WYATT (X)
Uni ted Water Idaho Inc.83676
overall and by service level and anticipate certain
growth levels within each area and plan our sources of
supply accordingly, but we do not set aside, to use your
term, or designate source of supply for a specific
developer.
Mr. Woodbury asked you aBY MR. SMITH:
question about immediate service.When Kastera
approached you about providing service, did you have a
discussion about when that service would be provided?
The discussion -- I cannot speak for what
John Lee had discussions with Kastera about.I did not
personally meet with Kastera during the initial
discussion , so I can t speak about specific responses or
statements made.
Okay, Mr. Wyatt, at the time you filed
your application, I believe you testified you had -- you
were aware, excuse me, that Kastera had not filed an
application for approval with the county; is that
correct?
Yes.
And I believe you testified that you
aware that they had still not filed the application;
correct?
I don t believe they have.
Kastera has represented to the City that
CSB REPORTING
Wilder, Idaho
WYATT (X)
Uni ted Water Idaho Inc.83676
it has a draft application.Have you seen that draft?
No, I have not.
At page 2 of your direct testimony, you
stated that you expect to serve 5 to 700 new customers
depending on zoning and conditions of approval.When you
use the terms "depending on zoning and conditions of
approval," what were you referring to?
Zoning and conditions of approval.
really don t know what else to make of it.
Okay, and I think you testified the basis
for that statement, the 5 to 700 homes, excuse me, was
the number given to you by the developer?
Yes, it was an expectation based upon
discussions that were had with the developers and our
company.
Okay, and you are aware that under the
county approval process today that the maximum number of
homes that Kastera can build is 108; is that correct?
m aware there s been discussion as to
how many can be built if it's not done as a planned
development.I believe it's in the 106 to 108 range.
So under the county process, your
understanding is that the 5 to 700 homes would be an
incorrect number?
Well , initially it might be, but long
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Wilder , Idaho
WYATT (X)
Uni ted Water Idaho Inc.83676
term, it may not be.
Okay.I believe your testimony is that
you only need an extension of your 12 inch main line in
order to serve Kastera; is that correct?
I believe the testimony is an extension of
the main line, yes, up to the Kastera development.
Okay, and your testimony was that the
developer will pay for that; correct?
Could you point to my testimony where
say that?
ll withdraw that question.Do you need
a 12 inch line to serve 108 homes?
I think that our engineering department
will design that.m not the engineer, so I'm not going
to presuppose what size line would be needed.
Is the line that you re proposing to
extend, the main line, the 12 inch line to go to Kastera,
intended to serve other areas or developments?
I believe that the line that we referenced
was to serve the Kastera development.
And that's the only development?
You know , I don t know the answer to
that.
But you re not presently intending to use
that line to serve anyone else?
CSB REPORTING
Wilder, Idaho
WYATT (X)
Uni ted Water Idaho Inc.83676
Well , it goes past other lands and I
imagine that other people could take service from it once
CSB REPORTING
Wilder , Idaho
We design looping systems in our system,
so eventually would it be a looped line someday?Could
be.
it's in place.
But you haven t had any present
discussions with anyone about using that line to serve
I have not.
Has anyone at United Water?
I don t know.
Mr. Wyatt, within the area of, and I'
use this in general terms, but this area around Kastera,
is United Water talking to any other developers or
landowners about serving?
That's a question better asked of Mr.
Rhead whose department receives those developers
But you don know?
don know.
You had discussions?
When you say " area around," I'm not sure
Well , in the general vicinity of Kastera.
Wha t doe s that mean?
them?
requests.
what you mean.
WYATT (X)
Uni ted Water Idaho Inc.83676
Well wi thin mi 1 e s .
Fifty miles?
Let'mi 1 e s .
m not sure what this has to do with the
issue of who should be better able to serve water to this
development, but I'll try to answer your question.
Within 50 miles of Kastera --
I want to make this --
-- we have received other developer
requests for service, yes.
You do have other developers?
Within 50 miles of Kastera, certainly, we
do.
Okay, how about wi thin 10?
I don t know.I don t have a map and I'
not going to speculate.
What other developers are you talking
to?
MR. MILLER:To which we d obj ect
incompetent and irrelevant and immaterial.The question
here is who should serve Trailhead.The question here is
not what United Water may or may not do with respect to
other proposed developments, so it's leading us very far
afield away and distracting the Commission s attention
from the issue that's really before us.
CSB REPORTING
Wilder, Idaho
WYATT (X)
Uni ted Water Idaho Inc.83676
Mr. Smith?COMMISSIONER SMITH:
The testimony from UnitedMR. SMITH:
Water is that they need to extend a 12 inch line and
Mr. Wyatt has said that they have no present intentions
of using that for anyone else.s also testified that
they have a source of supply that serves this general
area, I think he referred to it as their western service
area, so when the questions are asked of him about -- he
has testified that they have an available source of
supply.One of the relevant questions is what is the
available source of supply and to whom it will be
allocated in this area, so I think it is a relevant
question directly related to his testimony about what the
source of supply is and whether they can quickly serve
Kastera.
COMMISSIONER SMITH:Mr. Smith, I don
think that was your question, though, and I guess I want
to sustain Mr. Miller s obj ection to your question which
was who have you talked to within 10 or 50 miles which
don t think is relevant to what seems to be the question
you, I think , have already asked.
MR. SMITH:Let me rephrase the question
to what other developer he has talked to within the
vicini ty of Kastera about proposing service to.
MR. MILLER:You can t rephrase the
CSB REPORTING
Wilder, Idaho
WYATT (X)
Uni ted Water Idaho Inc.83676
question to make something that's irrelevant relevant and
this is irrelevant, plus Mr. Smith has misstated Mr.
Wyatt's testimony.Mr. Wyatt testified that the Company
does not allocate chunks of supply to specific
developers, it serves its system through its system, so
you can t rephrase an irrelevant question to make it
relevant is my point.
I think he has aCOMMISSIONER SMITH:
point.Mr. Smith , do you want to try and get back on
track here with regard to the Trailhead application?
Let me pursue a differentMR. SMITH:
line, if I may.
BY MR. SMITH:Mr. Wyatt, how many
addi tional homes in your western service area do you have
capaci ty to serve now?
I don t know.
How many do you serve with your existing
source of supply?
I don t have that information in front of
me.
How would we get that information?
We would do a record search of our
customer base in that area.
If United Water did not serve the Kastera
area or the Kastera development, could the capacity that
CSB REPORTING
Wilder, Idaho
WYATT (X)
Uni ted Water Idaho Inc.83676
you are using for Kastera be used to serve the Avimor
development?
We don t have capacity designated for the
Kastera development.I think I testified to that
already.
But you have a source of supply that you
will use for Kastera; correct?
We have available source of supply for the
Kastera development, yes.
Okay, my question is if you did not use
that source of supply for Kastera, could it be used for
the Avimor development?
MR. MILLER:Which again is irrelevant.
COMMISSIONER SMITH:Mr. Smith.
MR. WOODBURY:It is not irrelevant.
are talking about their testimony that they have an
available source of supply that is adequate to serve
There are present filings before thisKastera.
Commission to serve the Avimor development.Wi thin that
application is a cap of 500 gallons per minute.
question to Mr. Wyatt is very straightforward.He has a
western service area.If the source of supply used for
Kastera, whether it's 100 or 500 or 700, is not used for
Kastera, could United Water devote that source of supply
for service to Avimor.It is relevant and it is directly
CSB REPORTING
Wilder, Idaho
WYATT (X)
United Water Idaho Inc.83676
related to his testimony.
MR. MILLER:Perhaps I'm just dull, but I
can t see the relevance of if you didn t do A , could you
do B.All we re proposing here today is to do A; that
is, to serve Trailhead and the question of what we would
do if we did not serve Trailhead seems to have nothing to
do with the question of should we be permitted to serve
Trailhead, so again, I think it's irrelevant.
COMMISSIONER SMITH:I think, Mr. Smith,
that the Commission feels that this area has been
adequately explored and answered by Mr. Wyatt as to how
the Company serves its service area through its sources
of supply without allocating to specific developments, so
we really believe that's been covered.
MR. SMITH:Thank you, Madam Chairman.
MR. MILLER:Would this be an appropriate
time for a break?
COMMISSIONER SMITH:Yes, let's take a
ten-minute break.
MR. MILLER:Thank you very much.
(Recess. )
COMMISSIONER SMITH:All right, we ll go
back on the record.Mr. Smith.
MR. SMITH:Thank you.
BY MR. SMITH:Mr. Wyatt, just to make
CSB REPORTING
Wilder, Idaho
WYATT (X)
Uni ted Water Idaho Inc.83676
sure we re talking about the same thing, when you say
source of supply, are you talking about water rights?
Well , that's a component of source of
What else is a part of source of supply?
The actual capacity through either a
ground water well or a treatment facility to provide
CSB REPORTING
Wilder , Idaho
So source of supply would include your
plumbing as well as your water rights; correct?
In our vernacular, yes.
Okay.You would agree with me that the
supply.
component of your source of supply that is a water right
is fixed, is it not?
I believe that's right.
Okay; so if a developer comes to you and
says Mr. Wyatt, we d like for you to serve us, how do you
go about determining if your source of supply is adequate
Our engineers do that, I don
Would that be Mr. Rhead?
Yes.
Okay.With regard to the 140 acres that'
wi thin the area of impact wi thin the City, have you
talked to Kastera about serving that area?
potable water.
to serve?
WYATT (X)
Uni ted Water Idaho Inc.83676
I think that the testimony we filed is
that the service territory we ve asked for does not
CSB REPORTING
Wilder , Idaho
include that and I don t know what their intentions are
for that portion of land they own.
So you ve not talked to them about that?
No, I've not.
Okay.Mr. Wyatt, at page 6 of your direct
testimony, you indicated that
--
and this is in your
rebuttal testimony -- that United Water s participation
in the City s planning efforts was not specifically
requested by the City and our views were not solicited;
That's what it says, yes.
Okay.
(Mr. Smith distributing documents.
MR. SMITH:May I hand the witness a
COMMISSIONER SMITH:Yes, you can.
(Mr. Smith approached the witness.
BY MR. SMITH:Mr. Wyatt, I've handed you
correct?
Would you take a quick look at those for
Okay.
If you ll look at the first page, have you
ever seen that before?
document?
two documents.
me?
WYATT (X)
Uni ted Water Idaho Inc.83676
No, I've not.
Do you see where it says " Proj ect Summary
Yes, I do.
What does it say there?
It says to consider a Ci ty- ini tiated
comprehensive plan amendment to modify -- 1 , modify a
CSB REPORTING
Wilder, Idaho
portion of the comprehensive plan land use map and
policies adopting western Eagle sub area plan.A full
size map and application materials are available for
public review at the City Hall., adopt future
acquisi tions map and associated maps.3, update
appropriate sections of the existing plan to ensure
consistency with the new sub area land use plan , and then
And do you see the list of people to whom
that document was sent?
Yes.
Do you see where it says United Water,
attention Dan Brown?
I see that.
Is Dan Brown an employee of United
Yes, he is.
Okay, if you ll look at the second page
on that page?
it goes on.
Water?
WYATT (X)
Uni ted Water Idaho Inc.83676
and you see that says the City of Eagle will be holding
an open house to present future land use designation
policies for the area located between Linder Road and
State Highway 16 and between Highway 44 and Homer Road,
do you see that?
Yes.
Okay, and do you see the sentence that
says, "This is for the use on long-term utility planning
and service needs for the above-described area
I see that.
Okay, and again, the last person to who
this list of -- this document was sent was United Water,
attention Dan Brown; correct?
I see his name there, yes.I also
reference that the area that this letter referred to are
south of the Kastera Trailhead development.
But let me just ask you this:Sometimes
things fall between the cracks and you just miss things,
but don t you think it is a bit unfair to say the City
has not requested your input or United Water s input on
its planning efforts?
Well, before seeing these letters, that
was my belief.
Okay, but you would agree with me from
these letters that you were requested; correct?
CSB REPORTING
Wilder , Idaho
WYATT (X)
Uni ted Water Idaho Inc.83676
I would agree that Dan Brown was
requested.
Okay, and Dan is an employee of United
Water?
Yes.
MR. MILLER:Madam Chairman, I'd obj ect
counsel's attempt to create an inconsistency with Mr.
Wyatt's testimony.His full testimony is if United Water
received notice of the planning effort, it was only a
general public notice and that's exactly what this is.
It's not a request to participate, it's a general public
notice, so Mr. Smith's effort to create an inconsistency
in the testimony is incorrect.
Mr. Smith.COMMISSIONER SMITH:
MR. SMITH:I think the document speaks
for itself compared to Mr. Wyatt's testimony.I guess if
Uni ted Water s position is that we have to call them up
and invite them to come over to the meeting and make sure
they re there and go pick them up and bring them over
there, that would be a specific request.I think
Mr. Miller s arguments are a bit disingenuous.The
request was made of United Water as it was of all the
entities that are interested in planning efforts by the
City.The only reason it is relevant is because Mr.
Rhead or , excuse me, Mr. Wyatt testified they d never
CSB REPORTING
Wilder, Idaho
WYATT (X)
Uni ted Water Idaho Inc.83676
been requested to come to these, so I think the document
speaks for itself , as does Mr. Wyatt's testimony.
COMMISSIONER SMITH:Well, thank you,
gentlemen.I think the Commission is entirely capable of
reading Mr. Wyatt's testimony and understanding the
general nature of notices and invitation letters.
would just ask you to focus your attention on the issues
that the Commission must decide, which is does the
present convenience and necessity require the
certification of this area to this utility as requested.
Thank you.
MR. SMITH:And I have no further
questions.
Do we have questionsCOMMISSIONER SMITH:
from the Commissioners?
COMMISSIONER REDFORD:No.
COMMISSIONER KJELLANDER:No.
Do we have redirect,COMMISSIONER SMITH:
Mr. Miller?
Just one point, if I might.MR. MILLER:
CSB REPORTING
Wilder, Idaho
WYATT (X)
Uni ted Water Idaho Inc.83676
REDIRECT EXAMINATION
BY MR. MILLER:
Mr. Wyatt, both Mr. Smith and Mr. Woodbury
asked questions along the line of whether Kastera has
made application to the county yet and whether that
renders this application premature and so on.In United
Water s experience, is it uncommon for developers to
attempt to secure water supply before undertaking other
steps in the development process?
No, it's not uncommon.
MR. MILLER:Thank you.
COMMISSIONER SMITH:Thank you.Thank you
for your help, Mr. Wyatt.
THE WITNESS:Thank you.
(The witness left the stand.
COMMISSIONER SMITH:Do you have another
wi tness, Mr. Miller?
We do, Madam Chairman.TheMR. MILLER:
applicant would call Scott Rhead.
CSB REPORTING
Wilder, Idaho
WYATT (Di)
Uni ted Water Idaho Inc.83676
SCOTT RHEAD,
produced as a witness at the instance of United Water
Idaho Inc., having been first duly sworn , was examined
and testified as follows:
BY MR. MILLER:
DIRECT EXAMINATION
Sir, would you state your name, please?
Scott Rhead.
Are you the same Scott Rhead who
previously filed direct testimony in this case consisting
CSB REPORTING
Wilder , Idaho
Yes, I am
Are there any additions or corrections
that you need to make to your direct testimony?
No, there are not.
If I asked you the questions that are
contained in your written direct testimony today, would
your answers be the same?
Yes, they would.
And are those answers true and correct to
the best of your knowledge?
Yes, they are.
Did you also have occasion to prefile
of four pages?
RHEAD (Di)
Uni ted Water Idaho Inc.83676
written rebuttal testimony consisting of five pages?
Yes, I did.
Are there any additions or corrections you
need to make to your rebuttal testimony?
No, there are not.
If I asked you the questions that are
contained in your written rebuttal testimony today, would
your answers be the same?
Yes, they would.
And are those answers true and correct to
the best of your knowledge?
Yes, they are.
MR. MILLER:Madam Chairman, there were no
exhibi ts accompanying either the direct or rebuttal
testimony of Mr. Rhead, so we would ask that the
testimony be spread on the record as if read and would
tender Mr. Rhead for cross-examination.
If there is noCOMMISSIONER SMITH:
obj ection, the testimony will be spread upon the record
as if read.
(The following prefiled direct and
rebuttal testimony of Mr. Scott Rhead is spread upon the
record.
CSB REPORTING
Wilder, Idaho
RHEAD (Di)
Uni ted Water Idaho Inc.83676
Please state your name and business
address.
Scott Rhead, 8248 W. Victory Road
Boise, Idaho.
Please describe your employment with
Uni ted Water.
I am employed by United Water in the
capaci ty of Director of Engineering.I have been
employed by United Water for 15 years.I am responsible
for the design and construction of United Water
integrated water system.I am a licensed Professional
Engineer in the state of Idaho.
What is the purpose of your
testimony?
I will describe the facilities that
will be required to serve the Trailhead development and
Uni ted Water s ability to serve the development from
existing source of supply resources.
Please describe additional facilities
that will be required to serve the development.
Exhibi t No.1, filed with Mr. Wyatt'
testimony, is a map depicting the location of the
Trailhead development and United Water s existing
facilities.As depicted on the map, the development
would be served by extending a 12 inch main line from
Rhead, Di
Uni ted Water Idaho Inc.
Uni ted Water s existing facilities on Floating Feather
Road along Eagle Road and Willow Creek Road to the
development. This extension would be approximately 2.
miles in length.
What would be the cost of this
extension?
Al though detailed engineering plans
have not been developed, for planning purposes, United
Water estimates the cost of 12 inch main line
construction to be approximately $50 per foot, or an
expected total cost of $600,000.
Rhead, Di
Uni ted Water Idaho Inc.
Under United Water s Rules and
Regulations, who would pay for this 12 inch main
extension?
Under United Water s rules and
regulations this type of extension is part of United
Water s distribution system and is considered as
contributed facilities. The Developer is required to pay
all costs associated with this main extension without
refund from United Water.
Do you anticipate any issues relating
to right of way access for construction along Eagle Road
and Willow Road?
No, Ada County Highway District
allows water main construction wi thin the right of way
subj ect to permit conditions.
Can you estimate the amount of time
necessary for this construction?
I estimate the 12" main proj ect could
be completed in three months.
Please discuss United Water s source
of supply resources that are currently available to serve
the Trailhead development.
Uni ted Water s system is fully integrated.In order
to maintain reliability and redundancy, different sources
can and will be used depending on demand and time of
Rhead, Di
United Water Idaho Inc.
year.For example in the winter the Marden Plant
provides the maj ori ty of the source of supply for the
East main service level, West main and Floating Feather
service level.Floating Feather well and Redwood Creek
well are also used as demand increases in the summer.
Some of the more predominant ground water rights for the
West main and Floating Feather service levels are: Swift,
Veterans, Willow Lane, Floating Feather , and Redwood
Creek.
Rhead, Di'
Uni ted Water Idaho Inc.
Does United Water have a compressive
approach for planning to meet future demands?
Yes. United Water prepares a Water
System Master Plan (' Plan ) which is updated
approximately every five years.The most current version
is for the period 2005-2010.The Plan proj ects likely
demand over a multi-year period and identifies source of
supply resources necessary to meet the demand.The
numbers of customers to be added by the Trailhead
development over time are wi thin the planning parameters
of the Plan.
Based on the foregoing discussion , in
your professional opinion, does United Water have
adequate source of supply resources to serve the
Trailhead development.
Yes.In my professional opinion
United Water has adequate source of supply resources to
serve the Trailhead development.As the numbers of
customers wi thin the Trailhead development grows over
time, that growth is wi thin the growth levels proj ected
by the Plan.
Do you anticipate that additional
facili ties will be required for service to the Trailhead
development?
Depending on the eventual design of
Rhead, Di
Uni ted Water Idaho Inc.
the development, a Booster Station and Storage Reservoir
for fire protection and operational peaking will be
required to meet the Idaho Department of Environmental
Quali ty standards.The Booster will require redundant
pumps and standby power.The Storage Reservoir will be
in the range of 250,000-300,000 gallons.
Please describe the cost responsibility for booster
and storage facilities.
Rhead, Di
Uni ted Water Idaho Inc.
Under United Water s Rules and
Regulations these can be considered Special Facilities
and the developer will be required to execute a Special
Facili ties Agreement (" SFA"
) .
The standard terms of the
Commission-approved SFA require the developer to advance
the cost of construction and related costs.The
developer becomes eligible for refunds as customers are
connected and are providing new revenue to support the
investment.In this way, United Water s other customers
are insulated from speculative risk.
Please summarize your testimony.
The Trailhead development can be
connected to United Water s integrated system by
construction of the 12 inch mainline discussed above.
Uni ted Water has adequate existing source of supply
resources to serve the development. Any required
addi tional Special Facilities will be constructed
pursuant to United Water s existing rules relating to
Special Facilities.
Does that conclude your testimony?
Yes it does.
Rhead, Di
Uni ted Water Idaho Inc.
Please state your name.
Scott Rhead.
Are you the same Scott Rhead who
previously filed Direct Testimony in this proceeding?
Yes, I am.
What is the purpose of your Rebuttal
Testimony?
I will respond to certain statements
contained in the Amended Direct Testimony of Vern Brewer
and Nicole Baird Spencer filed on behalf of the City of
Eagle.
Do you have a general observation
regarding Mr. Brewer s testimony?
Yes.In my Direct Testimony, I
provided a detailed explanation of United Water s ability
to serve the Trailhead development.In his Testimony,
Mr. Brewer does not dispute any part of my Direct
Testimony regarding United Water s ability to serve the
development. Because my testimony is not challenged, I
take it that the City does not dispute United Water
ability to serve.
At pages 2-3 of his Direct Testimony
Mr. Brewer notes that a relatively small portion of
property owned or controlled by the Trailhead developer
is inside the City s area of impact. Do you believe this
Rhead, Re
Uni ted Water Idaho Inc.
is relevant?
No.Uni ted Water understands that
the developer does not at this time intend to develop
that area. United Water s Application in this case seeks
an expansion of its service area only for areas outside
the City s area of impact.
At page 3 of his Direct Testimony, Mr. Brewer
discusses the City s plans to serve the Trailhead area.
In this regard, have you reviewed the City s Water Master
Plan?
Rhead , Re
Uni ted Water Idaho Inc.
Yes I have.According to the plan
the northern boundary of its water planning area is ~
mile south of Homer Road.The Trailhead development lies
to the north of Homer Road and is outside the geographic
area that the City has included in its planning area.
Also on Page 3 of Mr. Brewer s Direct
Testimony he claims that Eagle s Brookwood well "will be
on line in 45-60 days.Do you believe the Brookwood
well will be available to provide service wi thin that
timeframe?
No.Based on the fact that the only
work completed to date is the actual well, and based on
my experience with overseeing the drilling and equipping
of various United Water wells, I don t believe pumping
equipment, electrical, and building construction can be
completed that quickly.
Both Mr. Brewer and Ms. Spencer make
the point that the Trailhead developers have not yet made
application to the County for subdivision approval and
the developers have not yet completed design of the
Is this unusual?development.
There are numerous steps in theNo.
subdivision development process.In United Water
experience, developers determine the sequence of those
steps depending on the circumstances of the development.
Rhead, Re
Uni ted Water Idaho Inc.
It is not unusual for a developer to confirm there is a
secure source of water supply before undertaking the
expense and effort of developing a design and seeking
other governmental approvals.
At page 4 of his testimony Mr. Brewer
points out that the annual average water bill for Eagle
customers is somewhat less than the annual average bill
for United Water customers. Please comment.
Rhead, Re
Uni ted Water Idaho Inc.
It is true that currently the City
tariff rate for water service is somewhat less than
Uni ted Water The City s current rates, however , may
not include recovery of the costs associated with the
City s ambitious plan to build a municipal water system.
These costs are unknown but potentially huge. Whether
those costs are eventually recovered through consumption
rates, connection fees, surcharges, or some other
mechanism, they will create upward pressure on the City
overall cost of service.
At page 4 of Mr. Brewer s testimony
he claims that the City of Eagle encourages conservation
of water by requiring the use of surface water for
irrigation.Please comment.
Requiring the use of surface water
for irrigation can not be equated to encouraging
conservation for several reasons.First of all the use
of surface water for irrigation, where available, is
required both by Idaho state law and Ada County
ordinance.Thus, Eagle can make no "conservation " claim
for requiring what the law already requires.Secondly,
in many cases, using un-metered, less expensive
irrigation water may lead to greater use, not less use of
the overall water resource.It is true irrigation is a
different type of water (i. e. not treated to potable
Rhead, Re United Water Idaho Inc.
water standards) but this in itself is not conservation.
Finally, the City of Eagle historically has not provided
its existing water customers with any conservation
education or information, water saver kits, or other
conservation programs typically offered by water
providers.In contrast, United Water has had an active
and varied conservation program in place for many years.
In addition
Rhead, Re
United Water Idaho Inc.
Uni ted Water has recently completed and the Commission
has recently approved in part a detailed revised Water
Conservation Plan.
Also on page 5 of Mr. Brewer
testimony, he claims that the City of Eagle can serve
Trailhead " immediately. "Please comment.
This cannot be accurate because, as I
stated earlier in my testimony, The Brookwood well
currently lacks pumping equipment, electrical , and
building construction , and these components take
considerable time to procure and construct.
In addition, on page 5 of Mr.
Brewer s testimony, he contends it is premature for
Uni ted Water to amend its certificate until the developer
makes some basic decisions about what it is going to
propose.Do you agree?
No.United Water currently has
various portions of certificated area for which no
development plans or decisions have been made by the
landholders.These include infill areas and areas south
and east of the City of Boise.The Trailhead developer
has requested to have Trailhead included in United
Water s certificated service area and, as I testified
above, it is not unusual for a developer to confirm there
is a secure source of water supply before undertaking the
Rhead, Re
Uni ted Water Idaho Inc.
expense and effort of developing a design and seeking
other governmental approvals.
At page 5 of her Direct Testimony Ms.
Spencer comments on the per-lot cost of United Water
estimated facilities construction costs.Do you think
this is relevant?
Not really. Under United Water
Rules and Regulations these costs are contributed by the
developer without possibility of refund from United Water
Rhead, Re
Uni ted Water Idaho Inc.
advanced under a Special Facilities Agreement with
refunds supported by customer revenues thus insulating
current customers from speculative developer risk.
Ultimately, the developer must determine how water
facili ty construction costs affect the economics of a
development, but that decision does not affect other
Uni ted Water customers.Addi tionally, Both United Water
and Eagle have main lines in Floating Feather road.
Eagle also has water mains at approximately Beacon Light
and Highway 55 but this is approximately the same
distance away from Trailhead as are United Water
So it is likely that the cost for mains,facilities.
booster station, and water storage will be in the same
cost range for both Eagle and United Water.
Does that conclude your rebuttal
testimony?
Yes it does.
Rhead, Re
Uni ted Water Idaho Inc.
(The following proceedings were had in
open hearing.
COMMISSIONER SMITH:Mr. Woodbury, do you
have any questions?
MR. WOODBURY:Yes , I do,
Madam Chairman.
CROSS-EXAMINATION
BY MR. WOODBURY:
Mr. Rhead, there were some questions of
Mr. Wyatt regarding a certificate and an obligation to
serve, and in this certificate filing by United Water
the Company is stating it has adequate surplus capacity
to serve Kastera, is that your understanding?
That's correct.
And that representation is with respect to
now and if Kastera doesn t develop this year or next
year, will United Water still have adequate surplus
capaci ty to serve it without adding new supply?
Well , we re a growing system.
adding 2,000 customers a year, so the capacity that we
have gets incrementally used along the way.We have
programs, source of supply additions in our master plan
so again, it's not a straight answer , but we have source
CSB REPORTING
Wilder, Idaho
RHEAD (X)
Uni ted Water Idaho Inc.83676
of supply now and we anticipate keeping ahead of
development in the future.
Did United Water s discussions with
Kastera precede or follow discussions with Avimor with
respect to the Company s capabilities?
I believe --
Madam Chairman?MR. MILLER:
Mr. Miller.COMMISSIONER SMITH:
Wi th due respect toMR. MILLER:
Mr. Woodbury and recognizing that Staff even though it
not taking a position in this case often is permitted to
cross-examination for purposes of clarifying the record
however, Staff is also constrained by the limits of
relevance, I would think , and whether the Company s plans
to serve other developments are relevant to the question
that you identified of whether its certificate should be
amended to serve this' development, so we re just going
very far afield it seems to me.
COMMISSIONER SMITH:Mr. Woodbury.
MR. WOODBURY:I don t believe that it is
far off.I think what we re talking about is United
Water s capability to serve.I think that Mr. Rhead on
his direct testimony, page 3, talks about United Water
having a, I think he says, compressive approach for
planning to meet future needs, but I think he perhaps
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RHEAD (X)
Uni ted Water Idaho Inc.83676
meant comprehensive and then he goes to discuss the water
system master plan and so what we are discussing is
Company capability here, and all I'm asking is what
assumptions were made by the Company regarding its
service capability and I only have a short question with
respect to Avimor and I think Mr. Rhead is capable of
answering it.
COMMISSIONER SMITH:So I guess I missed
your question, Mr. Woodbury.
MR. WOODBURY:What is my question?
COMMISSIONER SMITH:Yes.
Oh.MR. WOODBURY:I as ked whether
Company discussions with Kastera preceded or followed its
discussions with Avimor with respect to requests for
service.
COMMISSIONER SMITH:Mr. Rhead, can you
answer that question?
THE WITNESS:I believe I can.
COMMISSIONER SMITH:All right, I'll allow
the question.
THE WITNESS:I believe Avimor has been
ahead of this development.Avimor has been more of a
complex proj ect to understand and design and I believe it
started before this development when we were
approached.
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Uni ted Water Idaho Inc.83676
BY MR. WOODBURY:So then when United
Water and you had discussions with Kastera, you already
had in mind Avimor ' s requirements?
Yeah, that's correct.
Okay.There was some questions with
respect to whether
--
well, actually you state in
let's see, do you believe that a 12 or 16 inch main line
would be the facilities required to serve Trailhead?
Well, you know , it's a -- we re perplexed
with the right sizing of mains all the time.It would be
my opinion that where you re going to go
two-and-quarter miles to a development that the mlnlmum
should be 12 inch.The future out there depending on
service territory and other development and what
ul timately gets approved through density, the Company
would consider doing oversizing from 12 to 16.
Okay; you would -- do you recall that the
Company in comments filed with the Commission on May 31st
of '06 indicated Exhibit B attached to the commons
depicts facilities required to provide service to
Trailhead an approximate two-mile extension of 16 inch
main line north of the Company s Floating Feather main
line?
Yeah, I'm anticipating in that response
that the Company would consider oversizing when we make
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Uni ted Water Idaho Inc.83676
that decision.The developer through the contributed
portion of that would be responsible for 12 inch in my
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Wilder, Idaho
Okay, and that the main line facilities, I
guess, that are determined to be necessary would require
detailed engineering plans that have not yet been
That's correct.
And those facilities would be contributed
wi thout refund pursuant to the Company s line
The main extension portion would be
contributed without refund, that's correct.
You estimate that there will be a
three-month time period required to complete a 12 inch
Would it be a similar time should it be
sized larger to 16 inch?
Yes, that's correct.That wouldn t be a
opinion.
factor in the time line.
With respect to the Company s water system
master plan, are you principally responsible for
development of that plan?
That's correct.
And the current version you state is for
the years 2005 through 2010.Are there any assumptions
developed?
extension?
main project.
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Uni ted Water Idaho Inc.83676
that you made in developing that plan with respect to the
Ci ty of Eagle s municipal water system and whether it
would grow?
We don t make any particular assumptions
about where cities are going to expand their water
system.I mean , we don t consider what Meridian
necessarily or Kuna or what the City of Eagle is going to
What we do identify is areas that are privatedo.
property and are potentially able to add to our
certificated area and we fill those in with a proj ected
density and an associated water demand across our system
going in all directions.
You state on page 3 of your direct that
the number of customers to be added by Trailhead over
time are wi thin the planning parameters of the Company
When you say " over time," whatwater system master plan.
time line are you talking about and how many customers?
Well, the current plans are out to 2010.
We have some preliminary estimates that go out to 2020 in
terms of density and associated water demand.
And you weren t speaking of Trailhead in
particular with respect to their proposed development?
Well , what I'm speaking of in our master
plan is we have a -- you know , we will take our main
service level, which is what we re talking about here,
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Uni ted Water Idaho Inc.83676
and we ll say okay, based on history, it's been
experiencing three percent growth and looking at the
amount of private property there and the pace of
development, we predict maybe there will be 5,000
customers over the next 20 years or the next 10 years,
whatever , so we do make an estimate out into the future
of what's going to happen in our main service level in
our master plan.
Okay, and Mr. Wyatt indicated that in
developing water system master plans the Company
certainly would like to cooperate with other water
providers.In your development of this water system
master plan, what type of interaction did you have with
the City of Eagle?
We didn t have any direct interaction with
the City of Eagle.
In your discussion with respect toOkay.
addi tional facilities which might be required for service
to Trailhead, you state that it's depending on the
eventual design of the development.I take it that you
would agree with Mr. Brewer that Kastera ' s failure to
provide any detail about its eventual design precludes
any determination of what may be required?
Madam Chairman , with dueMR. MILLER:
respect, as I indicated, I think it's customary for the
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Staff to be able to ask clarifying questions, but these
questions to me imply not just clarification but
assertion of a point of view.It seems to me unfair that
if the Staff has a point of view , as these questions seem
to imply, that it should be permitted to cross-examine
wi tnesses without presenting its own witness to present a
point of view that would be subj ect to cross-examination.
I think it is unfair to assert a point of view through
cross-examination without having stated that point of
view in public comments or testimony, and as is
tradition, we don t object to questions that clarify the
record, but we think that questions aimed at asserting a
point of view are beyond the proper Staff role given the
configuration of the case.
COMMISSIONER SMITH:Mr. Woodbury.
Madam Chair, Mr. Miller isMR. WOODBURY:
enti tIed to his opinion , but Staff didn t see that there
was any contentious quality to the question that was
asked.There are two statements within the record by the
parties.Staff used them as equivalent and I was asking
Mr. Rhead whether he believed -- he agreed with
It's not coming from left fieldMr. Brewer s statement.
These are questions that are presentedor anywhere else.
by the record which has been spread.
Could you ask thisCOMMISSIONER SMITH:
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Uni ted Water Idaho Inc.83676
question without referring to another witness ' testimony?
Can we just
--
if you want to know what Mr. Rhead thinks,
could we just find out what Mr. Rhead' s position is
without trying to characterize someone else s testimony
before they ve even testified?
MR. WOODBURY:I could do that, but had
as ked the question without referring to the testimony,
Mr. Miller would have asked me to indicate where I was
coming from.
Well , it is kind ofCOMMISSIONER SMITH:
hard to figure that out.
All right, I would ask,BY MR. WOODBURY:
Mr. Rhead, would you agree with the statement Kastera ' s
failure to provide any detail about its eventual design
precludes any determination of what may be required with
respect to booster stations and storage reservoirs?
I think we will need to know more
information to do that detailed design.
Wi th respect to booster stations, you
speak of redundant pumps and standby power.What factors
would indicate the need for a booster station?
We would need to estimate the overall
design, the overall demand, identify whether to put in
d need to predict a build-outtwo or three pumps.
schedule, have the time to make our DEQ submittals, so we
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Uni ted Water Idaho Inc.83676
really need to estimate a build-out schedule and the type
of consumption profile that we re going to experience.
Wi th respect to a storage reservoir , and
you speak of a 250 to 300,000 gallon one, you would need
to know what the Company s build-out schedule is up-front
in order to determine whether a reservoir would be
required?
Reservoirs usually get decided fairly
early in the process because they re more a requirement
of fire protection and fire protection comes with the
ini tial phases, but certainly, build-out schedule has an
effect on storage capacity, that's right.
And those discussions have not occurred
wi th Kastera?
Not in detail , no.
Have discussions occurred between yourself
and Kastera regarding later development of the 140 acres
wi thin the City area of impact and possible service by
Uni ted Water to that area?
Well , only in the initial phase, you know
when they came in and they said look , we have 640 acres
and we re looking into the future and at this time in the
county are plans are to do a farm cluster development,
but the ordinance allows things to happen in the future
and so in anticipation of that, we expect a certain
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Uni ted Water Idaho Inc.83676
amount now and a certain amount in the future and that'
the basis under which I say 5 to 700 customers could
happen there, but it's only based on development is going
to have a set-aside in the county and certainly in the
future the option is going to be open for there to be
more demand.Whether it happens or not, I don t know.
What was the answer to my question with
respect to whether you ve had discussions with Kastera
requiring United Water service to the 140 acres?Yes or
no?
ve had discussions to serve their
ini tial
--
to serve the 520 acres.
Nothing further?You ve had no
discussions regarding the additional 140?That's your
answer , yes or no?
I guess yes, that's my answer.
Yes, you have had discussions, okay.
Only that the ordinance is open in the
future which is the way the discussion went.That's what
they said.
Were there any discussions that occurred
with respect to United Water s service to the 520 under
this certificate application and then coming back in
later requesting service to the additional 140 acres?
No.
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Could those discussions have occurred with
anyone else under your control, such as Mr. John Lee?
MR. MILLER:Which would be irrelevant.
I f they didn t occur with Mr. Rhead, they
irrelevant.
COMMISSIONER SMITH:Mr. Woodbury.
BY MR. WOODBURY:Are you aware of any
discussions that occurred between Kastera and Mr. Lee
wi th respect to the 140 acres?
m not aware of any other discussions,
no.
Thank you.You state in your rebuttal
testimony that it's not unusual for a developer to
confirm there is a secure source of water supply before
undertaking the expense and effort of developing a design
and seeking other governmental approvals.Is it
reasonable for a company to provide that assurance
wi thout requiring more specificity as to the nature of
the development?
I think it's reasonable that we know in a
general nature that we can serve it, that at that time
that's all he needs to know.
And do you believe that you had sufficient
information provided by the developer at the time the
Company filed its application for expansion of
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Uni ted Water Idaho Inc.83676
certificate?
I believe we did, yes.
What percentage growth has United Water
experienced since April 2006 when you made your
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Wilder , Idaho
certificate filing?
You know , I haven t calculated it that
Just an estimate.
2006 was a pretty large year.m going
to say two-and-a-half to three percent.
I s today ' s cost of supply the same as cost
of supply in April of 2006?
I haven t added any supply.
Pardon?
I haven t added any supply since 2006, so
Do you think that it's reasonable to
expect it will be at least six months before Kastera
completes its county application process and is prepared
m not familiar with their requirements.
I understand from previous testimony that they haven
made an application yet, so...
And you re not familiar with county
planning and zoning requirements?
specific.
don know.
to build?
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Uni ted Water Idaho Inc.83676
Only in the nature of our interaction with
them and can we provide service.m not familiar with
the specifics of their ordinances.
Would you accept that Kastera , Mr.
Fassino , informed the City on May 18th of 2006 that
United Water had immediate capacity and facilities in
place to serve Trailhead?
MR. MILLER:Could we have a reference or
a document we could look at to see the source of this
assertion?
MR. WOODBURY:m as king whether he would
accept that Mr. Fassino informed the City.It is of
record and we can perhaps detail --
Then why don t weCOMMISSIONER SMITH:
have the record?
MR. WOODBURY:Pardon?
Let's have theCOMMISSIONER SMITH:
reference, Mr. Woodbury.
I don t have the referenceMR. WOODBURY:
and I'd reserve the right to call Mr. Rhead after I talk
to Mr. Fassino.
Okay, thank you.COMMISSIONER SMITH:
Thank you.MR. WOODBURY:
Wi th an application forBY MR. WOODBURY:
service, does the Company start a file or a work request
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United Water Idaho Inc.83676
in which it keeps track of hours spent?
Yeah , once I think there s a certain
amount of traction from the
--
from a developer and it
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Wilder , Idaho
looks like it's got some direction, we will set up a
preliminary account and start to track hours, yes.
Certain amount of traction?
Right.
Have you developed such an accounting --
We have a Trailhead file, yes.
You have?
Yes.
And are you aware of how many hours have
been spent on Kastera Trailhead application to date?
I can t tell you the hours right today,
An estimate?
Oh, I've probably put in 50 to 60 hours,
John Lee would have 30, Mr. Wyatt would have at least as
much as myself or more, so, you know, maybe 300 hours
MR. WOODBURY:All right, thank you.
Madam Chair , Staff has no further
questions of Mr. Rhead at this time, but we would reserve
the right to recall him.
COMMISSIONER SMITH:Thank you
no.
total.
110 RHEAD (X)
Uni ted Water Idaho Inc.83676
Mr. Woodbury.
Mr. Morris.
MR. MORRIS:Yes, I would like to call
Mr. Thomas Fassino at this time.
COMMISSIONER SMITH:No, no, do you have
any questions for Mr. Rhead?
CSB REPORTING
Wilder , Idaho
MR. MORRIS:No, I do not.m sorry.
BY MR. SMITH:
COMMISSIONER SMITH:Okay, thank you.
Mr. Smith.
MR. SMITH:Thank you, Madam Chairman.
CROSS-EXAMINATION
Mr. Rhead, you testified that the
discussions you had with Avimor preceded the discussions
wi th Kastera; is that correct?
That's correct.
And in your Avimor filing -- and when
say "you," I'm talking about United Water -- you
committed no more than 500 gallons per minute to the
Avimor development without acquiring additional source
supply; isn t that correct?
Yeah, that's our limit right now , that'
correct.
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Uni ted Water Idaho Inc.83676
Okay; so your testimony today is that you
can t serve Avimor without an additional source of
supply, but you can serve Kastera who came after Avimor
wi thout additional source of supply; is that correct?
MR. MILLER:That's not his testimony.
COMMISSIONER SMITH:Mr. Miller.
MR. MILLER:We obj ect
mischaracterization of his testimony.
COMMISSIONER SMITH:Mr. Smi th .
MR. SMITH:Let me rephrase the
question.
COMMISSIONER SMITH:Thank you.
BY MR. SMITH:You committed, United Water
commi tted, 500 gallons per minute to Avimor; correct?
That is correct.
If you go beyond the 500 gallons per
minute, you need a new source of supply; correct?
Not necessarily.I mean, we need new
source of supply in our west main service level
eventually.We plan growth in our west main service
level.Avimor was a piece of that.Cartwright Ranch is
a piece of that.Hidden Springs is a piece of that.The
county landfill is a piece of that.Eventually we will
need to add source.
But your Avimor filing says you will
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Uni ted Water Idaho Inc.83676
commit only 500 gallons per minute at this time;
correct?
At this initial phase, that's right.
When Kastera came to you, you told them
that you had an adequate source of supply for them;
correct?
That's correct.
How do you determine, then, that you don
have enough source of supply for Avimor , but you do have
enough for Kastera?
MR. MILLER:Again, that mischaracterizes
the record or the answer.We obj ect
mischaracterization of the testimony.
COMMISSIONER SMITH:Mr. Smith.
MR. SMITH:I would ask Mr. Miller to
explain why it's mischaracterized.
COMMISSIONER SMITH:Mr. Miller.
MR. MILLER:The witness has testified
that there is adequate supply for Avimor as currently
planned.Mr. Smith tries to characteri ze the testimony
as saying there s not adequate supply for Avimor as
understood the question.
COMMISSIONER SMITH:That's kind of what
heard , too, Mr. Smith.
BY MR. SMITH:Let me try again , Mr.
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Uni ted Water Idaho Inc.83676
Rhead.You only have 500 gallons per minute that you can
supply to Avimor at this time; correct?
re only willing to commit 500 gallons a
minute for this initial phase.We have what we have.
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Wilder , Idaho
Okay.You used the phrase with the other
developments in that area in your answer to Mr. Woodbury,
okay?What other developments in that area were you
referring to Cartwright Ranch, the
build-out of Hidden Springs, developments around Duncan
Lane, you know , developments in our main service level
west main service level.
Are you finished?
Our west main service level.
Are you finished?
Yes.
Okay, are any of these developments west
We have some planning going on around in
our Eagle service area that's west of Highway 55 , Two
Ri vers.You know , there are, I think there are, pockets
of development in our Eagle service area that are in the
planning phase that's west of Highway 55.
How about in the foothills?
referring to?
Well , Cartwright Ranch is in the
of Highway 55?
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Uni ted Water Idaho Inc.83676
foothills, Hidden Springs is in build-out in the
foothills, the landfill is in the foothills.
m sorry, let me be more specific,
foothill area west of Highway 55.
Well , the Avimor development that'
currently in consideration by this Commission has an area
that's west of Highway 55.
Are you referring to any other
developments in the foothill area west of Highway 55
besides Avimor?
Well, we ve also requested to serve a
development called Lanewood which is west of Highway
55.
Any more?
That's all that come to mind.
Excluding Lanewood, then, the onlyOkay.
foothill development in that area of the foothills west
of Highway 55 that you were referring to is Avimor; is
that correct?
Well , I consider Cartwright Ranch a big
foothills development in that area for us.I mean
Cartwright Ranch and Hidden Springs and Avimor are all --
the Dry Creek development is also in play.You know,
I think they have atheyve come and talked to us.
communi ty submitted to the county, so the Dry Creek area
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Uni ted Water Idaho Inc.83676
has also been in to see us, so when I say foothills
planning, most of that is east of Highway 55.Only
Avimor has an area that goes west of Highway 55 in the
foothills besides Kastera.
Okay.Going back west of Highway 55 in
the foothills , the only development that you are, you,
United Water are, talking to about serving is Avimor; is
that correct?
That's correct.
Mr. Woodbury asked you a question about
the booster pumps and storage required for Kastera.
you need to know the characteristics of that development
in order to determine whether you need a booster pump or
storage?
Well, we would need to know demand
characteristics.We would need to know whether we
We can decide thatactually need a booster pump or not.
just based on elevation, so we would know that we would
need a booster immediately.The design of the booster we
would need more information.
you have that information?
No,do not.only have enough detail
right now know the first phase.
And the first phase what?
It'the farm cluster,104 customer
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Uni ted Water Idaho Inc.83676
customers.
Okay; so when you re testi fying about the
500 to 700 homes that might be built up there, that'
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Wilder , Idaho
your speculation about the size of the development;
That's correct.
I mean, there s no information right now
that would suggest 500 to 700 homes; correct?
That's correct.
And at the time you filed your testimony
in this case, you weren t aware that Kastera had not
filed an application -- let me rephrase that.At the
time you filed your testimony, were you aware that
Kastera had not filed an application with the county?
My understanding is they have not filed
anything with the county.
So you don t know what they are going to
as k for in terms of development?
That's correct, I don
correct?
And as we re here today, you don t know
what the development will look like, do you?
That's correct, I don
Are you aware that under current Ada
County ordinances they can only build 108 homes in the
Kastera development?
117 RHEAD (X)
Uni ted Water Idaho Inc.83676
I understand in a non-farm cluster program
that that's all they can build with that amount of
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Wilder, Idaho
acreage , that's right.
And they don t have enough land to do
anything other than a non-farm cluster , do they?
That I'm not aware of.
Okay.As I looked at your testimony, you
estimated the cost of serving Kastera as approximately
$1.2 million; correct?
Correct.
And that would include two-and-quarter
miles of 12 inch pipeline?
Correct.
And I want to make sure the record is
clear , there was a reference to a 16 inch line, what you
are proposing is a 12 inch line extension; correct?
What I'm saying is that the developer
would be responsible for the 12 inch piece.The Company
will consider and want to leave the option open to
oversize that to 16 inch.
And the cost of building the 12 inch line,
your estimate was $600, OOO?
$50.00 a foot, that's correct.
Is that cost still valid today?
I hope so.The price of oil changes every
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Uni ted Water Idaho Inc.83676
day.
If United Water got ready to build this
two-and-quarter miles of pipeline, where would it run,
where would you put it?
My expectation is we have a corridor that
the Ada County Highway District allows us to lay water
mains in.I think we occupy the north and east parts of
the right of way, so my expectation is we would be in
Eagle Road's right of way north until it crosses, I
believe, Beacon Light and then it becomes a road called
Willow Lane and then we d stay in Willow Lane s right of
way up to the entrance to the development.
Okay, and if you ran your 12 inch line up
that Eagle Road to Willow Lane, what portion of the
Kastera lands would you be adjacent to?
Essentially none.It's all in ACHD right
of way and I don t know that Kastera has any ownership
along that two-and-quarter miles until we get right to
their entrance into the subdivision.
Okay, but the entrance to their
subdi vision would be on the west side; is that correct?
I call it the north side.I mean
two-and-quarter miles up from Floating Feather
intersection is the entrance into Kastera ' s development.
That's where we hit Kastera ownership.
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Uni ted Water Idaho Inc.83676
But the Kastera ownership that you
building the line to is on the west side of their
property; correct?
They own on the east side of Willow
Lane.
And if you re going up Willow Lane, then
you I re hitting the west boundary of their property;
correct?
m in the right of way all the way.
mean, eventually I get in front of their ownership.
in the right of way, inside the right of way.When I hit
right in front of their access, their ownership, then we
would turn and go into land that they own.
And their land from that point extends in
what direction?
From Willow Lane goes east.
0 ka y;you would the west side
their property line;correct?
Yes.
Okay.If they do the cluster development,
do you understand that they would have to build it on
percent of that land base up there, of the 500 acres?
You know , I'm not really sure of the
detail of that.That's my general understanding, yeah.
That's the idea of a cluster is they ve got to cluster in
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Uni ted Water Idaho Inc.83676
tight.They can t be more than three-quarters of an acre
and that's the idea is to tighten them up.
What part of the 500 acres would they be
clustered?
You know , that hasn I t been explained to
I assumed it would be someplace where the topographyus.
would allow it to be clustered like that, someplace where
the valley is flatter, in other words, not on the
hillsides because I think they ve got to keep them pretty
tight, but I really don t know.
Is that information helpful to you in
making a determination about serving them?
It doesn t matter as far as sizing the
inch line on the way up to the development.Once it gets
to the development, it's very important to know how the
It doesn t matter particularly onsubdivision lays out.
the route to get there.
Okay, you had some testimony about sizing
of lines and how difficult it was, if there are 108 homes
up there, do you need a 12 inch line to serve the 108?
You know , I would never recommend running
two-and-quarter miles with less than a 12 inch main.
mean , that's a major corridor road, it's a long distance,
there s quite a bit of head loss.12 inch would be what
I would design for.
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If you were going to serve 500 homes, what
size line would you run?
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Wilder , Idaho
Twel ve inch.
So whether it's 100 or 500 you would run
For that kind of distance in that
location, I'd run the same line.
Okay.Are you aware that were the City to
serve that same area, they would only have to build about
3 miles of line?
You know, that's a possibility.m not
really aware, totally aware, of where they could come
from.That's a possibility.
Okay, and, you indicated in your, I think
it's your, direct testimony at page 2 that this 12 inch
line could be built in three months, is that still
I believe that's true.
And that would be starting when?
As soon as we can obtain the Ada County
Highway District permit and, of course, get approval from
How long do you think it will take to get
the Highway District permit?
I think their turn-around is about two
the same line?
true?
the Commission.
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weeks.
Would the Highway District need any
information in order to give you the permit to do that?
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They need a general running line and a
traffic control plan.
Has Kastera told you where they would like
the service line, the main line , to go?
Only as far as to the entrance to the
development and I guess I have to clarify that.They
told us
--
I mean , we know where their property hits
We designed it to that entrance.
Okay, and when you build this 12 inch
line, you don t intend for it to serve any other areas
other than Kastera , do you?
m not sure of that.re going to run
a 12 inch line two-and-quarter miles, it's going to
front a lot of property.If we re requested the service
and the Commission will allow us to serve it, we I re going
Do you have any specific property in mind
that you re talking about?
Not at this time.
You heard Mr. Wyatt testify, I believe,
that source of supply includes your water rights, did
Willow Lane.
to serve it.
you?
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Yeah, water rights are definitely to be
considered in source of supply, that I s right.
I mean, water rights are a component of
your source of supply?
Absolutely.
Is it your testimony that you don t need
any additional water rights to serve Kastera?
I believe our water right portfolio would
accommodate Kastera, that's correct.
Okay.Do you know what water right you
would use to serve Kastera?
I tried to explain that in testimony.You
know , we really don t know depending on the time of year
what water is going to go where.We have a very
integrated system.We have several wells in our main
service level and depending on time of year, certain
sources could come on.Certain sources could be out for
maintenance, so I can t say specifically what actual
molecules are going to go to Kastera.
Do you have a primary water right that you
would use to serve Kastera?
Again , depending on time of year, I can
be specific.The Marden treatment plant is a pretty
primary source in the wintertime.As demand comes up,
Floating Feather will run more, so between Marden and
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Uni ted Water Idaho Inc.83676
Floating Feather.The Swift complex will come on,
Veterans will come on, so it's a very co-mingled,
integrated water system.I really can t be specific as
actual source.m not trying to be coy.
Okay;you know what well would be
used to serve Kastera?
Same answer.The wells are all integrated
just like the water rights are.
Can I take it from your testimony that
there are a number of other customers that are served
from those same sources?
Yes, you can.
Okay.Now , the water rights that you
would use to serve Kastera, are they included in your
rate base?
Yes, I believe through the last general
rate process we went through that our water right
portfolio has been accepted into rate base, the costs.
So existing United Water customers paid
for those water rights?
MR. MILLER:Madam Chairman, the question
just totally misapprehends the nature of the ratemaking
process and who pays for what.Again, the issue before
us today is should United Water s certificate of
convenience and necessity be expanded to serve this
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United Water Idaho Inc.83676
development.The question is not what is the proper
ratemaking treatment of water rights, nor is it how
Uni ted Water s rates are set generally.I would ask that
the Commission stay focused on what the issue before us
is.
COMMISSIONER SMITH:Mr. Smith.
MR. SMITH:I just asked a very simple
question.It was not whether it's appropriate or
inappropriate to include their water rights in the rate
base.just asked do existing customers pay for those
water rights that are being used to serve Kastera.
COMMISSIONER SMITH:Well would just
ask that for your educational purposes maybe a sit-down
session with the Staff sometime would be useful.
MR. SMITH:Okay.
BY MR. SMITH:Mr. Rhead, when you say
Uni ted Water s system is fully integrated, what does that
mean?
What I mean is we have multiple sources of
supply.We have multiple reservoirs for peaking and
operational and fire protection.We have an integrated
pipe network so that certain lines can be taken out of
service for repairs, what have you, so what it means is
that each area is supported by other areas so that we can
be down for periods of maintenance and also to meet
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United Water Idaho Inc.83676
peaking requirements.
So are all of your wells interconnected?
Well , sure.I mean , each well goes out of
a wellhead and hits our distribution system and then that
distribution system is networked throughout the system.
So a well, say, in east Boise can supply
water to the western service area?
Theoretically, the water that comes out of
sources of supply in east Boise can make it all the way
to west Boise, that's correct and vice versa.
Okay, but if a well goes down, you just
bring in a water source from some other well; is that
correct?
That's the general idea, that's right.
So is it your testimony that you can I
actually tell what well or what water right is used to
supply an individual customer?
COMMISSIONER SMITH:You know , Mr. Smith,
I think that question has been asked and answered several
times , so I think in the interest of moving on, we ought
to.
MR. SMITH:Okay.
BY MR. SMITH:At page 2 of your
testimony, you said some of the predominant ground water
rights for the west main are the Swift, where is that
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located?
At Lake Harbor area.
And Veterans?
Veterans Memorial Parkway.
Willow Lane is where?
The Willow Lane sports complex next to the
river.
And then Floating Feather?
Floating Feather and Eagle Road area.
And Redwood Creek?
Farther out on Floating Feather and then
south of Floating Feather , I think it's, I'm not sure of
the coordinates street, Park , maybe.
What is the integrated municipal
application package?
It's a water right ini tiati ve that the
Company took several years ago to provide the Idaho
Department Water Resources document that shows its
current water right portfolio and anticipated future
needs.
Is IMAP relevant to this proceeding?
To which we obj ect.MR. MILLER:The
integrated municipal application package is discussed
nowhere in either Mr. Rhead' s testimony or Mr. Wyatt'
testimony.This is beyond the scope of the direct
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testimony.Cross-examination is supposed to be related
to the direct testimony and there s no discussion of that
issue in the direct testimony.
COMMISSIONER SMITH:Mr. Smith.
MR. MILLER:Again , it is leading us
astray from the issue that's before the Commission.
COMMISSIONER SMITH:Mr. Smith.
MR. SMITH:Madam Chairman, I acknowledge
that the IMAP is not specifically mentioned in the direct
testimony.What I'm trying to elicit is whether it is
relevant to the testimony about the integrated system
that Mr. Rhead testified to.If it's not relevant, he
can just tell me.
COMMISSIONER SMITH:And you re not as king
relevant in a legal sense?
MR. SMITH:No.
COMMISSIONER SMITH:Okay.Well , let'
get his opinion on this, then.
THE WITNESS:The IMAP, I guess, is the
acronym.It's currently stayed by the Department of
Water Resources.The status of our existing water right
portfolio which is what we re going to use to serve this
development is what we have and so I don t really believe
that the IMAP is relevant to what we re talking about
today.
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Uni ted Water Idaho Inc.83676
BY MR. SMITH:Okay.Do you know when
Kastera needs water service?
Not specifically, I can t say.
Do you know how many customers you serve
wi th the current integrated system?
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Wilder , Idaho
I believe we re somewhere over 82 000
customers right now.
Do you know how many additional customers
you can serve with that system?
We haven t determined that, no.
Mr. Rhead, at page 4 of your rebuttal
testimony, you stated that the cost per lot of United
Water s facilities costs is irrelevant.
MR. MILLER:Mr. Rhead, you can look at
BY MR. SMITH:Do you have a copy 0 f your
rebuttal testimony?
I do.
Mr. Rhead, I direct your attention on page
Do you see that?
ve got it.
Your response was that Ms. Spencer
testimony that the cost per lot calculation was
irrelevant; correct?
I say not really.
your testimony.
4 to line 22.
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United Water Idaho Inc.83676
Well , you said not really because the
current customers are insulated under your special
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facilities agreement; correct?
That's correct.
But the cost of supply for the services
will be borne by the homeowners in the Kastera
development; correct?
Maybe you need to clarify the question.
Your testimony goes to existing customers
Okay.
But the cost of the service will be borne
by the people in the development; correct?
I don t know how to predict that.I mean
I assume that a developer prices his lots according to
what it costs him and the way he prices his lots I don
really know , but I guess I'm assuming that yeah, the
owners in Kastera will pay the cost that the developer
Okay, but somebody is going to pay for
Well , I would expect that's right.
Okay.At page 5 of your testimony, of
m not sure.
your rebuttal , you state the total construction cost for
being insulated.
establishes.
that; correct?
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Uni ted Water Idaho Inc.83676
Uni ted Water and Eagle are roughly the same.Do you
recall that?
That was my understanding.
But if there are more homes built on the
Kastera development, those costs, even if they are the
same, would be spread across a greater number of people,
of customers; correct?
I would expect that's how Kastera would
price it.I don t know.
MR. SMITH:Madam Chairman, I have no
further questions at this time.
COMMISSIONER SMITH:Thank you, Mr. Smi th .
There are no questions from the Commission.
Redirect, Mr. Miller?
MR. MILLER:Madam Chairman, I believe
that my redirect would benefit from the lunch hour break
and would be potentially streamlined based on having the
break before the redirect.
COMMISSIONER SMITH:You know how I hate
that.All right, we ll be at lunch until 1:15.
MR. MILLER:Thank you, Madam Chairman.
(Lunch recess.
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